The Fiscal Impacts of Wildfires on California Municipalities

Liao, Yanjun; Kousky, Carolyn

doi:10.2139/ssrn.3612311

Cited by 9 publications

(9 citation statements)

References 61 publications

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“…Second, local governments can generally rely on state reserve funds (Urahn and Irwin, 2020;Gregory, 2013) and federally-backed insurance like FEMA to pay for damages to physical property in the aftermath of a hurricane (Garrett and Sobel, 2003;del Valle et al, 2019;Masiero and Santarossa, 2020). The availability of federally-backed flood insurance to home owners through the National Flood Insurance Program could also offset negative impacts on house prices or even increase property tax revenues if hurricane disasters stimulate housing re-development (Gaul, 2019;Liao and Kousky, 2020). Third, municipalities can leverage debt instruments in absence of tax-based revenue sources to fund capital investments and infrastructure.…”

Section: Introductionmentioning

confidence: 99%

Local Public Finance Dynamics and Hurricane Shocks

Jerch¹,

Kahn²,

Lin³

2020

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the Wharton Risk Center, OSWEET, and the UEA 2020 meetings for extremely helpful comments. We also thank Marc Joffe and Natalie Cohen for their generous insights on municipal bond markets. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Section: Introductionmentioning

confidence: 99%

Local Public Finance Dynamics and Hurricane Shocks

Jerch¹,

Kahn²,

Lin³

2020

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“…Additional research is also necessary to understand the impact of wildfire suppression on other levels of government—namely, local governments. Considering that local governments bear responsibility for many building and land use decisions, and initial fire attack with local fire departments, there is a particular need to understand how existing agreements and fiscal impacts influence decision-making at the local level (Liao and Kousky 2020). Further analyses of state and local policies affecting land development and that encourage landowners to reduce wildfire risk are also important for further research.…”

Section: Discussionmentioning

confidence: 99%

“…Little has changed over the past decade regarding this misalignment of incentives among the various levels of government (Baylis and Boomhower 2019). Yet, as previously noted, very little is actually known about how much states are already spending on wildfire suppression, how these expenditures are changing and what affect federal aid may have on subnational policy decisions (Liao and Kousky 2020). Thus, policymakers continue to wrestle with ways to reduce the fiscal impact of wildfires and identify appropriate incentives structures to balance state fiscal obligations (Hoover et al 2015; Hoover 2020; GAO 2012).…”

Section: Introductionmentioning

confidence: 99%

The Fiscal Burden of Wildfires: State Expenditures and Funding Mechanisms for Wildfire Suppression in the Western U.S. and Implications for Federal Policy

McIver

Cook

Becker

2021

State and Local Government Review

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The number and size of wildfires in the western United States have increased dramatically in the last 30 years. The rising cost of wildfire suppression has become a significant concern for all levels of government, although most attention has been focused on the federal level. Much less is known about the financial impact of expenditures on states, which retain responsibility for suppression on over 480 million acres of state and private forests. This study collected data on state expenditures for wildfire suppression in the western United States from 2005 to 2015 to examine fiscal burdens and compare funding mechanisms used to cover those costs. Our analysis finds that western states expended $11.9 billion on wildfire suppression over the 11-year period and used own-source funds to cover 88 percent of these costs. States displayed a variety of mechanisms for covering their cost obligations with tradeoffs that may affect non-wildfire policy priorities.

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“…1 See Dell, Jones, and Olken (2014) and Kolstad and Moore (2020) for a review of the climate-economy literature. 2 See Noy and Nualsri (2011), Deryugina (2017), Deryugina, Kawano, and Levitt (2018), Miao, Hou, and Abrigo (2018), Jerch, Kahn, and Lin (2021), Tran and Wilson (2021), and Liao and Kousky (2022).…”

Section: Modelmentioning

confidence: 99%

The Impact of Weather on Local Government Spending

Zhao¹

2022

Federal Reserve Bank of Boston Research Department Working Papers

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While there is a new and rapidly growing literature on the effects of climatic factors on economic and social outcomes, little research has been conducted to understand the fiscal impact of weather, especially at the sub-state level. Using data from Massachusetts municipalities from 1990 through 2019, this paper estimates government spending as a function of temperature and precipitation while controlling for municipality and year fixed effects and municipality-specific time trends. The results show that weather has statistically significant and economically meaningful effects on local government spending. A 1 degree Fahrenheit increase in the average temperature results in a 3.2 percent increase in real per capita total general fund expenditures. Some government functions, such as public works and general government, are affected more by weather than others. The impact of weather may be persistent and heterogeneous across municipalities. There is some evidence that municipalities adapt to rising temperatures over time.

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The Fiscal Impacts of Wildfires on California Municipalities

Cited by 9 publications

References 61 publications

Local Public Finance Dynamics and Hurricane Shocks

Local Public Finance Dynamics and Hurricane Shocks

The Fiscal Burden of Wildfires: State Expenditures and Funding Mechanisms for Wildfire Suppression in the Western U.S. and Implications for Federal Policy

The Impact of Weather on Local Government Spending

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