News

Areas that were once economically important languish as jobs are clustered in urban centers, creating a feeling of powerlessness as their populations grow older, poorer and less educated…

These days, cities like Portland, Salt Lake City and Boise, Idaho, are gobbling up more of the jobs than ever, especially the good ones. Half the jobs in Oregon, for example, are now clustered in just three counties in and around Portland, according to a study by Headwaters Economics, a nonprofit research group in Bozeman, Mont. Almost two-thirds of Utah’s jobs are along the Wasatch Front, which runs from Salt Lake City to Provo.

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A new study claims that raising royalty rates across the board for fossil fuels may benefit coal when compared to other feedstocks where higher royalties would represent a larger portion of total costs.

“We find costs for natural gas would actually rise by a larger amount,” said study author Mark Haggerty, a researcher for Bozeman, Montana-based Headwaters Economics. “It’s proportionately more expensive to deliver natural gas to market when compared to coal [under increased federal royalties].”

Haggerty said a lot of changes in the energy sector have been hitting coal harder, hitting Wyoming governments and coal-dependent communities hard. The stiff headwinds for the coal industry, where some of the largest players are toppling like giant industrial dominoes, made Haggerty ask if larger royalties being proposed now by the Department of the Interior and Bureau of Land Management would make things even worse for the coal industry.

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Today, Malheur Cunty has a rare opportunity: the ability to continue its agricultural tradition while capitalizing on its abundant federal land by protecting a portion of it as a National Monument or Recreation Area.

To understand what impact this could have on the region, Headwaters Economics recently studied the relationship between Western rural counties and federal protected lands, and compared Malheur County to similar counties with large protected areas.
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The best way to protect a community from wildfire is to build it smartly, said Ray Rasker, an economist and executive director of Headwaters Economics.

“Planning doesn’t mean not building. It doesn’t mean telling people what not to do,” he said. “Planning means using a creative mix of both incentives and regulations to make sure that future development is safe. And that’s different from telling people not to build.”
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The report, released by Bozeman-based research group Headwaters Economics, studied the number of single-family homes in the state from 1970 to 2013 using data from the Department of Revenue. In that span, the number of homes went from around 150,000 to 327,000. On the whole, the period from 2003 to 2013 saw more home construction than any other decade in Montana’s history, with more than 44,000 homes built.

However, the study found that some parts of the state are constructing more than others. Many western counties have seen a large proportion of their houses go up in the last 10 years. More than 27 percent of Broadwater County’s homes were built between 2003 and 2013. For Gallatin County, that number was around 23 percent, with 6,000 of the county’s more than 26,000 single-family homes constructed in the same 10-year span.
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But while FireWise may help homes survive a wildfire, economist Ray Rasker says it’ll take a lot more than that to keep the cost of fighting fires from continuing to spiral upwards.

“The effective strategy is to really think about where we’re going to build the next homes and under what conditions we’re going to build those homes. Because the agencies are getting to the point where they can no longer afford to defend all of it.”
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Colorado, Wyoming and Montana all connote images of rural splendor punctuated by the occasional community. What most people don’t appreciate is how urbanized those and other Western states actually are, according to an analysis from Headwaters Economics.

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The effective royalty rate on coal — measured against market prices — is 4.9 percent, well short of statutory rates (12.5 percent and 8 percent on surface and underground coal), and lower than the effective rate on natural gas (9.7 percent), according to our research at Headwaters Economics…

In addition, the BLM should create a natural resources trust fund for the benefit of communities near public lands. We estimate BLM could build up a fund of more than $8 billion over 20 years that can fund infrastructure, schools, and economic development activities in communities exposed to the boom and bust dynamics of fossil fuel extraction.
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This Monday the White House will hold its Conference on Aging. While much of the gathering concentrates on the importance of healthcare and retirement security, older Americans also are having a significant economic impact on communities across the U.S. West…

…Research by Headwaters Economics conducted last year on migration not surprisingly found that retirement destinations are characterized by large and growing older populations, but also are seeing growth across all age groups. In fact, all of the top retirement destinations in the West are experiencing high net in-migration across all ages.
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…But for some reason the center here is holding. Sandpoint, 400 miles from Boise, and 70 miles from Canada, is bucking a major demographic trend: In an era when many rural places are bleeding out, this one is holding its own. In the all-important sweepstakes of the West — where are people going, and staying — Bonner County, population 41,000, beat out Denver, Seattle, Silicon Valley and other booming urban hot spots, according to census figures…

…“There is a fair amount of economic research that says all you need is one person who is willing to dig in and fight to stay in a place, and that resonates,” said Megan Lawson, an economist at Headwaters Economics, a Montana research group that recently completed an economic analysis of Sandpoint. For many, she added: “It becomes a self-perpetuating process.”
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A recently released report by Headwaters Economics investigates the reasons why Bonner County’s economy is strong and resilient despite its distance from major population centers and economic hubs….
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Trails don’t talk, but they do tell tales.

And the common theme is economic prosperity, according to participants at last week’s South West Crown Regional Trail Conference in Seeley Lake….

Justifying such projects could become easier, thanks to a new Trail Benefits Library of research on trails developed last winter. Megan Lawson of Headwaters Economics demonstrated how the collection of more than 100 studies can answer questions raised by grant applications, government agencies or donors about a trail’s need…
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It’s hard to imagine Bozeman without its trail network, the city’s miles of paths well-loved by crowds of walkers, bikers and runners.

And there’s plenty of data to back up the conventional wisdom that the trail systems provide value to Bozeman and other communities, according to research by locally based Headwaters Economics.

It used to be, said Headwaters economist Megan Lawson, that trail systems were viewed as a luxury. Increasingly though, they’re seen as a necessity for “high amenity” communities like Bozeman, where the quality of life represents a major draw, akin to good schools, well-kept streets and low crime rates, she said….
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Congress long ago established a basic principle governing the extraction of coal from public lands by private companies: American taxpayers should be paid fair value for it. They own the coal, after all….

In 2013, approximately 40 percent of all domestic coal came from federal lands. A recent study by the independent nonprofit research group Headwaters Economics estimates that various reforms to the royalty valuation system would have generated $900 million to $5.6 billion more overall between 2008 and 2012…./blockquote>
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Recent studies show what Utahns already instinctively know: travel and tourism in the Beehive State have increased significantly in recent years, creating more jobs and income for local residents.

Utah’s public lands have played a key role in this economic uptick, and the benefits extend beyond travel and tourism to other important sectors such as health care, finance and engineering.

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…To make a real impact, Rasker says, we need to start doing something about the areas that have yet to be developed. Drawing on input from rangers, fire marshals, ecologists and government officials from all over the Western U.S., he’s developed a nine-point plan that would reduce the risk of wildfire by controlling the pattern of future development in the WUI.

The most basic step: requiring counties to disclose the fire risk potential to homebuyers. That alone, he argues, will have people thinking twice about building in the WUI….

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…Mark Haggerty, of Bozeman, Montana-based Headwaters Economics, says all interests need to rethink both PILT and SRS, perhaps combining the compensation funds. One measure would be to distribute money to rural counties in need, rather than by the existing formula, based on counties’ total public land acreage, which doesn’t account for the urban development that generates plenty of revenue.

Haggerty and others have also pitched the idea of a natural resources trustto remedy the situation. Under that scenario, managers would bank appropriations over the next 15 to 20 years to build an endowment for rural services and land management. A trust could support restoration projects, wilderness management and logging, when appropriate, while leveraging the resources of regional cooperative programs, such as Idaho’s Clearwater Basin Collaborative…

“If we can show that we’re working collaboratively on the ground with the county commissioners, the timber industry and the environmental community, to recognize both local needs and national interests,” Haggerty says, “then we ought to have a payment system that encourages and rewards that kind of management planning.” Oregon Gov. John Kitzhaber, D, has included the idea in a recent forest-management reform package….

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By most measures, Ohio’s taxes on energy production are low. They’re less than 1 percent, compared to 7 percent in Texas, 11 percent in Wyoming, and 25 percent in Alaska.

Kasich wants to raise state taxes to 2.75 percent or even higher. Drilling companies threaten to leave and go to low-tax states. But that hasn’t happened historically.

A study by Headwaters Economics notes “the academic literature generally disagrees that tax competition is important to oil production.”

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The cost trends around wildfire also are troublesome. Since 1990, the number of homes destroyed has tripled. Yet in the last 30 years, 60 percent of new homes in the U.S. were built in the wildland-urban interface, the private land next to public forests.

Federal firefighting costs average $3 billion annually; also triple the amount from a decade ago. Our research and others indicates that at least one-third and up to 95 percent of the firefighting bill goes to defend private homes….

What has not yet been triedis altering the pattern of future home development on fire-prone lands. The key is to get the incentives right. Currently, local governments benefit from a federal government subsidy that pays the bulk of firefighting costs and underwrites risky and expensive developments. Passing on more costs to local governments – where home building is permitted – would incentivize better planning.

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With this year’s 50th anniversary of the Wilderness Act some people are asking whether protected public lands, set aside for conservation, also provide economic benefits in addition to their scenic and recreation values.

The good news is that in today’s modern, technologically-advanced economy, wild places can help communities attract and retain talent. Wilderness (and national parks, wildlife refuges, national monuments) also can play a role in attracting the tidal wave of retiring Baby Boomers. And, more obviously, wild places create jobs in outdoor recreation, now a $646 billion industry.

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