November 18, 2008

Fires Burn A New $236 Million Hole In Budget

From the "It Only Seems To Get Worse Department"... budget advisers to Governor Schwarzenegger say the cost of fighting wildfires since July now totals almost $305 million. That's about $235.8 million more than was set aside in the budget Schwarzenegger signed into law less than two months ago.

The firefighting pricetag is current as of this past weekend, and reflects not just the struggle to contain the still burning blazes... but of the state to adequately set aside money for disasters.

The official 2008-2009 budget included just $69 million for emergency fire suppression. And it seems safe to assume that just about everyone knew that wouldn't be enough, given this past summer's wildfires.

And now, for some particularly troubling context: state government spent $518.4 million on firefighting in the 2007-2008 fiscal year. That dwarfed the costs in any recent year... and yet, we've already spent more than half that amount in just the first five months of this fiscal year.

While gubernatorial advisers won't say so, it may be fair to tack the $236 million in unbudgeted firefighting costs to the already large revenue gap announced this month of $11.2 billion... thus making the problem inch ever closer to $11.5 billion. (Some in the Capitol will no doubt quibble with this fast math, arguing that it mixes a lack of revenues with an excess of expenses... others will proclaim that's a distinction without a difference.)

Schwarzenegger budget spokesman H.D. Palmer says the governor's line-item vetoes when signing the budget... totaling around $510 million in the general fund... were made with an eye toward socking away cash for just these kinds of expenses. That, of course, was before the bottom dropped out of the revenue forecasts in that budget.

You may remember Schwarzenegger pushed for a new fee in this past year's budget debate to help fight fires... a fee hike that died in the Legislature. The governor has said he intends to re-introduce the proposal in January.

Last month, when responding to a question about then-burning fires (which are part of the $305 million pricetag), the guv said the following:

"We need to raise the insurance fees, the homeowner insurance fees, by a certain extent. And, of course, there are going to be debates, is it a tax? It doesn't matter what it is. Let's increase it, let's create the extra revenues and keep people safe. Public safety is the most important thing."

update: Schwarzenegger budget guru Palmer says the cost of SoCal firefighting since just last Wednesday is now near $11.1 million... that's part of the bigger numbers mentioned above.

July 18, 2008

10 Days, $130 Million in Fire Costs

An eye-popping reality check this afternoon on the cost to fight wildfires in California: the state Department of Finance says total costs in the first 10 days of July alone were $129.5 million.

About half that amount... $65.4 million... has been paid for through the state's special reserve fund. The rest has been charged to what's effectively a state-controlled credit card, allowing firefighting needs to be met without delay.

What's really staggering is that it appears the new expenses can be added to those racked up to fight these fires before July 1. The earlier costs were attributed to the budget year that ended on midnight June 30. That estimate was $62 million.

So the grand total for the vast firefighting task in northern California these last few weeks to looks to be almost $192 million. For some context... that's close to half the amount spent in all of last year by the state on fires. And that almost one third of last year's total in just the first 10 days of July.

July 7, 2008

Smoke Gets In Your… Budget

As we choke our way through a particularly bad air day here in Sacramento -- blame the mix of the heat and the lingering smoke from the myriad of area wildfires -- it's worth noting the impact of firefighting on the state's already strapped finances.

Data released last week by the Governor Schwarzenegger's Department of Finance says that emergency fire suppression costs for the fiscal year that ended a week ago today totaled almost $393 million. That's far and away more than state governments costs for any fire season in the last decade.

For the current spate of blazes (remember, the above figure goes all the way back to last year's devastating southern California fires), the price tag through last week stood at $62.4 million.

When firefighters deploy anywhere in the state... they also take along the bean counters. Seriously.

"When a crew is deployed to fight a fire of the magnitude of the fires we’re seeing now, one of the key members of that group is staff that handles the accounting," says H.D. Palmer, the governor's budget spokesman.

And as the fires burned and burned in the summer of 2007 and earlier this year, they also burned a gaping hole in state finances. Palmer says the budgeted amount for fire suppression in the just-ended fiscal year was $82.4 million. The extra cash came out of the state's reserve fund, which itself only amounted to $858 million.

In other words... more than a third of the reserve cash set aside in last year's budget deal ended up going to fighting fires.

Some, if not most, of that moolah comes back to the state in the form of reimbursements from the federal government. While state firefighters are first on the scene, as much as 75% of the final costs are often paid back by the feds.

But don't hold your breath waiting for the money. Palmer's colleagues in the Schwarzenegger fiscal shop say federal government accountants often quarrel with state accountants over the bills... a process that can take two to three years to complete.