The Cost of Wildfire: How Past Tax Cuts and Future Proposals Burden Oregon Communities

Human-caused climate change has led to widespread adverse impacts in every region around the globe. As the world temperature continues to increase, wildfires are likely to intensify. Fires will become larger, more frequent, and more severe. Natural disasters that would otherwise be considered once-in-a-lifetime events will become regular. The Labor Day Wildfires of 2020 are a prime example of this. These fires were spread across the state of Oregon and burned almost as many acres of forest in two weeks than had burned in the previous 50 years. Additionally, 5,000 homes and businesses were burned and nine lives were lost. The cost of fighting the fires alone was $354 million. Cleanup cost the state an additional $355 million. Reports estimate that climate change could soon cause a 200 percent increase in acreage burned, which could lead to yearly wildfire-related costs of $9.2 billion. The effects of climate change and the ensuing impacts of increasingly devastating forest fires loom large for residents and landowners in Oregon.

While the world attempts to figure out how to combat climate change, lawmakers in Oregon are left with the task of determining how to pay for its effects, specifically the cost of fighting and cleaning up wildfires. At the beginning of 2024, State Senator Elizabeth Steiner proposed a controversial bill that, if it had passed, would have shifted the cost of fighting fires from forest and range landowners to the general public. House Bill 4133 would have amended Oregon law so that “the public as a whole share responsibility for protecting the forests of the state.” Currently, Oregon taxpayers already pay for the majority of wildfire programs through the state’s general fund. HB 4133 would have eliminated the acreage assessment that requires forestland owners to pay a small amount per acre: either 7.5 cents or 5 cents depending on the classification of the land. This assessment goes toward the cost of fire protection and suppression on these acres. The bill also required that $7 million per year for fire protection be paid out of the general fund, i.e., taxpayers. Thus, taxes on the largest timber companies would have been lowered. The bill would have required the general public to pay the difference and shifted the cost of wildfires to people who are not directly involved in timber production, including low-income communities. Private forest landowners would have paid half of what public landowners pay for small fire protection. General fund contributions, those paid by the public, would have to cover the costs of large fires, administration of fire preparation, and fighting of large forest fires.

Fortunately, HB 4133 was shelved before it could reach a vote and is now considered dead. However, Steiner has made it clear that HB 4133 was just the beginning and there are plans to introduce similar bills in future legislative sessions. If any iteration of HB 4133 passes it will contribute to the economic struggles that disadvantaged Oregon residents and governments, especially those in rural areas, are already facing. Many counties can barely afford essential services such as schools, libraries, and sheriff’s departments. Fighting wildfires will only become more difficult if counties cannot fund critical infrastructure. Historically, Oregon counties relied heavily on funds brought in by timber harvest on both federal and nonfederal lands, but they have struggled since the 1990s when environmental protections reduced logging in federal forests and the state legislature enacted tax cuts for private timberland owners. Federal laws share receipts with counties from timber harvest on federal lands, but timber harvest on federal lands steeply declined after protections for the northern spotted owl were implemented in the 1990s. During this same time period, politicians eliminated a severance tax that had taxed private timber companies based on the value of the trees they logged. The funds from this tax had been used by counties to fund schools and local governments. Thirty years later, Oregon’s economy is still grappling with the consequences of reduced timber income. No matter one’s personal views on tax cuts or environmental protections, the combined effect has resulted in enormous economic struggles for many Oregon counties and their residents.

The dramatic reduction of both revenue sources within the span of only a few years crippled local governments’ ability to pay for essential public services. Just one county in Oregon lost an estimated $108 million from timber payments related to logging on federal forest land and $122 million from the severance tax for timber companies that logged private land. In total, counties have missed out on approximately $3 billion from just the loss of the severance tax. Taxes now barely keep up with each county’s needs. For example, forestland owners are taxed on only 16.4 percent of the real market value of the property they own. This low percentage translates to a loss in revenue for local public schools. Some of the lost revenue for schools is now partially supplemented by State funds, but even with the state supplement many counties have to fix crumbling school infrastructure through bonds.

HB 4133 was not designed to protect the interests of the residents and small businesses of Oregon, but instead to protect the large timber and investment companies that have acquired more forest land, employed fewer people, and have grown in net worth since the tax cuts in the 1990s. Thanks to changes to the federal tax code in the 1990s investment firms have been able to buy land at a much lower tax rate, only paying 15 percent in capital gains taxes as compared to the standard 35 percent. Around the same time, many companies that went into debt during the recession in the 1980s began selling forestland. Now, the largest landowners in Oregon are billion-dollar corporations and multinational investment firms, such as Weyerhaeuser, Sierra Pacific, and Shanda Asset Management, a Chinese-owned investment firm. Altogether, the 10.4 million acres of commercial and small forest land and rural residential properties only generate $88 million in tax revenue, only $33.1 million of which goes toward fire protection. When the estimated yearly cost of wildfires is in the hundreds of millions of dollars, a tax bill that provides cuts to wealthy landowners does not make fiscal sense.

Weyerhaeuser, a supporter of Steiner and one of the world’s largest private owners of timberland, would have been one of the biggest beneficiaries if HB 4133 had passed. Currently, the Seattle-based company owns one-sixth of the private forestland in western Oregon but only pays approximately $5 per acre in taxes. HB 4133 could save the company, currently valued at $24.5 billion, $1.4 million a year. In comparison, small landowners pay taxes at a rate of at least 100 times that amount. Yet, despite Weyerhaeuser’s continued growth and its powerful influence in the state, the company employs only 950 Oregonians, 3,500 fewer Oregonians than the number it employed in 2006. While Weyerhaeuser does support local communities through donations––it has donated millions to programs such as fire and sheriff departments––local governments should not have to rely on the goodwill of private companies to pay for public services.

Additionally, private forest owners are part of the problem and part of the solution when it comes to wildfires. While the majority of acres burned are on federal land (80 percent), private lands that were clear-cut within 5 years of a fire burned hotter. One study found that forests planted for private timber harvest in Western Oregon made it easier for fires to burn due to young trees and the homogenization of fuel. During the Douglas Complex fire in 2013, private timber burned 30 percent more severely. Private owners already receive the benefit of faster responses by firefighters and a better chance of suppression because private lands tend to be easier to access than federal forests due to a higher prevalence of roads. Instead of a shift in the tax scheme, there needs to be a shift in how private landowners manage timber plantations to help reduce fire risk.

In the face of climate change–related wildfires, Oregon lawmakers have a responsibility to make sure that tax schemes account for the safety and economic security of Oregon residents. While lawmakers do need to ensure that the costs of fighting wildfires and fire cleanup are covered, the burden should not be on individual taxpayers alone. HB 4133, and its potential future iterations, are not about protecting Oregonians and Oregon’s forests from the ever-increasing wildfires; it is about shifting the burden onto the public and cutting taxes for private entities that can afford it the most.