Montana lawmakers have chosen a study of state and local tax policy as their top priority during the 18 months before the 2021 legislative session.
Headwaters Economics, a research firm, suggested the state’s tax structure is not generating revenue in areas where the economy is growing, such as the service sector and investment income. Instead, it relies on declining revenues from oil, gas, mineral and timber production. Commerce also is increasingly taking place online and the state is not levying taxes on sales made by out-of-state companies, officials have noted.
Montana lawmakers will take a comprehensive look at state and local tax policy over the next two years. Legislators say a changing economy and increasing population means Montana should consider new ways of collecting taxes…
According to a report presented to state lawmakers last year by Bozeman based Headwaters Economics, “Montana likely is not taxing the economy where it is growing.”
The Headwaters report says that when it comes to jobs and income, Montana is transitioning from producing goods to providing services.
Across the country, the outdoor recreation industry puts millions of people to work and boosts the economy by hundreds of billions of dollars… But do recreation amenities lure new residents — who might bring even more economic benefits — as well as tourists? To find out, Headwaters Economics, a nonprofit research group, looked at where populations have grown or dwindled since 2010. They compared counties where the economy is closely tied to entertainment and seasonal visitors’ spending, or “recreation counties,” to counties with economies driven by other factors.
The federal government should do more to encourage wildfire-prone communities to plan for blazes that can’t be entirely prevented, a land management consultant told lawmakers yesterday.
“I think we should reward good land-use planning where it exists,” said Ray Rasker, president of Headwaters Economics, a Montana land management and research group, at a House Natural Resources subcommittee hearing.
Rasker, called by the Democratic majority to testify on wildfire-resistant communities, said measures such as defensible space around homes and fire-resistant construction often make the difference for homes that survive wildfire, an unavoidable feature of Western landscapes.
Those measures are more important than ever, he said, because of increased development in the wildland-urban interface. From 1990 to 2010, a total of 43% new homes were built in the WUI, and more than a third of U.S. homes are on those lands, Rasker said.
But the message hasn’t fully reached local officials, and wildfire-oriented land-use planning isn’t emphasized in college and university programs, Rasker said.
One result: Planners haven’t been exposed to wildfire issues, and fire agencies in wildfire-prone communities haven’t been exposed much to land-use planning.
“They need help getting that done,” Rasker said, responding to questions from Rep. Deb Haaland (D-N.M.), chairwoman of the Subcommittee on National Parks, Forests and Public Lands.
After the apocalyptic Camp Fire reduced most of Paradise to ashes last November, a clear pattern emerged.
Fifty-one percent of the 350 houses built after 2008 escaped damage, according to an analysis by McClatchy. Yet only 18 percent of the 12,100 houses built before 2008 did.
What made the difference? Building codes.
…Unfortunately, short-term thinking can triumph over common sense. Cities facing severe fire risks can avoid compliance with the fire-resistant building codes, or choose to avoid their obvious advantages, despite the fact that “a new home built to wild-fire-resistant codes can be constructed for roughly the same cost as a typical home,” according to a report by Headwaters Economics.
Nevertheless, experts say, McClatchy’s analysis reinforces their belief that California’s fire-safe building code can make a difference in an era of increasing vulnerability. Daniel Gorham, a former firefighter and U.S. Forest Service researcher who works for the Insurance Institute for Business & Home Safety in South Carolina, said the California code is becoming a model for other fire-prone states.
“California is leaps and bounds ahead of other parts of the country,” Gorham said. “California is on the forefront.”
Advocates say fire-resistant building materials aren’t particularly expensive. A study last fall by Headwater Economics, a consulting firm in Bozeman, Mont., found that “a new home built to wildfire-resistant codes can be constructed for roughly the same cost as a typical home.”
As U.S. economic growth in the past decade assumed an increasingly urban character, that diverse set of strengths enabled this town to defy a pervasive narrative of rural decline. Hamilton’s population of 4,728 is up more than 10 percent since 2010, reflecting a Western renaissance that contrasts with the experience of small towns in other regions.
“It’s a pretty sweet spot to be in,” said economist Ray Rasker, of Headwaters Economics in Bozeman, Mont. “You can have the same job you’d have in Seattle and go fly-fishing in the afternoon. . . . It’s the quality of life. It attracts talent. Pretty soon, talent builds on itself, and word gets out.”
…Nationwide, since the recession’s end, people have been more likely to move to counties with opportunities for outdoor activities than those without them, according to a January study by Headwaters Economics.
“Recreation may make the difference between gaining or losing population, particularly in rural counties,” the study found.
Engineers designed and built a full-size duplex home. On one side, the house has cedar siding, vinyl gutters, single-pane windows and bark mulch around the foundation. On the other side, the house is designed to be fire-resistant, with cement siding, metal gutters, double-pane windows and gravel around the foundation.
“We’ve used construction materials and building practices that we have found through our research, and others’ research, makes a building resistant to wildfire exposure,” explains fire engineer Daniel Gorham, who helped design and carry out the fire test. For example, a 5-foot zone around the fire-resistant side of the house is devoid of combustible material, including plants.
… A 2018 report by Headwaters Economics, a Montana-based group that studies land management, found it costs about the same amount to build a new fire-resistant house as it does to build a typical house with cedar siding.
Across the western U.S., towns surrounded by public lands are facing an increasing bind: They’re seeing a huge surge in visitors coming to play in the forests and mountains surrounding them, which is leading to an economic boom. But, at the same time, federal funding to manage these lands has been drying up.
“There are these dramatic increases in recreational uses of public lands, and at the same time dramatic declines in recreational budgets,” says Megan Lawson, a researcher at the Montana-based think tank Headwaters Economics.
A recent analysis by the group showed that visitation to U.S. Forest Service and Bureau of Land Management land has risen by about 15 percent over the last decade, while budgets for programs that support recreation in those agencies has fallen by a similar amount.
According to Headwaters, since 2010, the Bureau of Land Management’s recreation budget has fallen by 18 percent, or $14 million. The Forest Service’s recreation budget has fallen by 16 percent or $49 million in the same time period.
“We’re recruiting talent that could go to Boston, New York, L.A.,” said Ray Rasker, executive editor of Bozeman, Montana-based Headwaters Economics and a consultant for the BEA. “The surrounding public land is the ace in the hole. If you come here, you can go fly fishing after work, or ride your mountain bike.”
…For western states, where most federal land is concentrated, national parks and forests are a key economic driver. One study by Headwaters Economics found that, from 1970 to 2015, counties with the most federal land saw faster population growth, and higher growth in incomes and jobs, than counties with the least. National parks alone added $20.3 billion to the U.S. GDP in 2017—a 28 percent increase from 2012, according to the National Park Service.
…Headwaters Economics, a Bozeman, Mont.-based independent, nonprofit research group, contends in a blog post on its website this week that logging and other “timber management” can be justified in some areas, “but it rarely helps our communities confront looming wildfire disasters in the face of a warming climate and continued home building on fire-prone lands.”
“Better land use planning and improved design of our built environment is our best bet at reducing risk from wildfires,” writes Kelly Pohl, a researcher at Headwaters who specializes in land use planning and wildfire.
Zellner’s experience underscores what economists and civic boosters alike say is a key piece of the economic development puzzle in rural Montana communities: The access that well-connected airports give residents to the rest of the world.
“In spite of the Internet access, we still need to see each other face-to-face,” said Ray Rasker, executive director of Headwaters Economics in Bozeman. “And that’s what airports represent.”
….“If I was king of Montana and I wanted to do something useful in eastern Montana, I would put a big airport there,” said Rasker, who has published research arguing that air access to major urban centers explains much of the difference between rural counties in the American West that have performed well in economic terms and those that have struggled in recent decades.
Rasker and his co-authors say that amenities like public lands make many places in the rural West attractive destinations for knowledge-based workers — people like the Zellners — but that airport access is often a limiting factor.
Their analysis found that Western counties closer to airports with several commercial flights a day generally had higher per-capita incomes and more diverse economies. In contrast to more isolated rural areas, they said, those “connected” rural counties were behaving in economic terms more like cities.
Mark Haggerty, an independent researcher with Headwaters Economics, said that the forest trust proposed in the bill addresses a systematic problem with the current arrangement.
“Rural communities with natural resource economies are especially vulnerable, both to volatility in markets and uncertainty of policy coming from Washington, D.C.,” Haggerty said. “This bill, and the trust concept in general, is a piece of a much bigger effort to help rural communities capture the wealth they generate in the economy, whether that be from forest products, agriculture, recreation or manufacturing.”
Haggerty described how such a forest trust could work in a report for Headwaters. According to the report, county payments totaling $750 million were made to nearly 2,000 local governments in 2018 in 52 U.S. states and territories. Included in that total are Payment in Lieu of Taxes (PILT), the Secure Rural Schools and Community Self-Determination Act (SRS) and National Wildlife Refuge Revenue Sharing Payments (RRS).
A few relatively simple, affordable modifications to a home’s roof, walls, windows, deck, and landscaping can be the difference between the home’s survival and loss during a wildfire. For example, survivability of a home increases when it is constructed using ember-resistant, finer mesh in attic vents, noncombustible gutters, fire-resistant decking, and when a noncombustible landscaping zone is maintained in a five-foot area immediately around the home.
Where homes are spaced closer together, additional strategies become necessary to avoid home-to-home ignition, such as using noncombustible siding and tempered glass windows.
A study released last month by Headwaters Economics found the cost of constructing a home to such standards in Park County was roughly the same as a typical home. Using wildfire-resistant materials and design techniques have added benefits such as reduced maintenance and longer lifespans.
The new regulations codify the understanding that limiting home ignitability is the most important factor in preventing a humanitarian disaster.
Meeting these standards doesn’t have to be costly. A report by Pohl released in November found that construction costs for a model “fire wise” single-family home with a nonflammable asphalt roof and fire-resistant tempered-glass windows were $2,000 less than for a typical house….
In light of the recent National Climate Assessment, which predicts a massive increase in the frequency and severity of wildfire, Pohl said that funding preventive measures is a life-or-death question.
“The reality is we know how to do better,” she said. “But we are too slow to change.”
Homes in wildfire-prone areas around the U.S. could be built to better withstand blazes without increasing the cost of construction, according to a new report.
…Few states have adopted such codes, often citing housing costs, but the new findings suggest fire-plagued communities could curb damage and save lives with minimal effect on home buyers.
“It’s a proven method,” Kelly Pohl, a research and policy analyst at the Montana-based wildfire policy consulting firm Headwaters Economics, who co-authored the report with the Insurance Institute for Business & Home Safety on the report. “We now know that it’s also a cost-effective method.”
” Since 1990 60% of new homes in California, Washington and Oregon have been built in spaces abutting nature, says Ray Rasker of Headwaters Economics, a research firm…
Although Californian state law requires people to manage flammable vegetation within 100 feet of their home in order to create a buffer, local officials often fail to enforce it and opt for relatively lax construction standards for new homes. “We know how to make our houses and buildings safer in an urban environment,” says Mr Rasker. “Somehow if you live in the woods, these things don’t apply.”
“The trends are pretty astounding in terms of the number of acres burned, the length of the wildfire season, the numbers of structures lost,” said Kelly Pohl, a research analyst with Headwaters Economics, a nonprofit research group that helps communities develop wildfire plans. “If you look at the trends over several decades, they’ve all gone up.”
In California, 15 of the 20 largest fires in state history have burned since 2000. The state is “a bit like a canary in a coal mine,” Ms. Pohl said. “We are also going to see the same trend across other states in the country in the future.”
In the past couple of decades, there has been an explosion of development in high-fire-risk areas. There’s a term for this in the firefighting world: the WUI, pronounced “wooey,” short for wildland urban interface. In states such as California, Arizona and Washington, cabins, vacation homes and increasingly whole towns and even cities are spreading into forests and wildlands.
Research from the Western think tank Headwaters Economics shows that in the West, there are millions of homes considered to be at direct risk of wildfires. There are no signs of this trend of building in the WUI slowing down, even as climate change is predicted to bring longer and hotter fire seasons.
Ray Rasker of Headwaters Economics, an expert on wildfires and the built environment in California, said buildings in high-risk areas could be made more resistant to fires in future, often through relatively simple measures. He cited nonflammable roofing material and siding for houses, not using wooden decks, installing fine mesh screens on roof vents, and planting fire-resistant vegetation close to houses.
He also warned that in the aftermath of large fires there is often a temptation to waive or loosen high building standards in order to rebuild as quickly as possible, which he said would be a mistake.