California and Oregon lawmakers are considering significant wildfire prevention and relief packages after both states experienced devastating wildfire seasons last year.
More than one million acres burned in each state last year, a figure twice Oregon’s annual amount over the past decade, according to the Oregon Department of Forestry.
The rating agencies are incorporating the likelihood of natural disasters into the analysis of municipal credits through systems that take climate change into account.
In most cases, the rating agencies, however, have not viewed natural disasters, including wildfires, as being a credit risk to state and local budgets, because of fiscal support from state and federal governments. Of the California blazes, Moody’s Investors Service said in a September
Regardless of credit, the states are actively preparing.
California Gov. Gavin Newsom on Tuesday will sign a $536 million fire prevention legislative package that includes $125 million from Greenhouse Gas Reduction funds and $411 million from the general fund. The Legislature approved the package Monday.
The legislative package builds on $323 million of funding for wildfire prevention included in Newsom’s proposed 2021-2022 budget.
“This year, we are budgeting more than $1 billion, with more than $500 million in early action spending for fire prevention including fuel breaks, forest health and home hardening to help protect Californians from catastrophic wildfires,” Newsom said Thursday in announcing the legislation.
California is already facing a drought and the money targets forest health and vegetation management projects on public and private lands, improvements in fire breaks, home hardening against fires, firefighting training and economic stimulus.
In Oregon, lawmakers are debating 50 bills related to aiding residents affected by last year’s wildfires and enacting wildfire prevention measures, some of which have arisen out of a taskforce started by Gov. Kate Brown. The Legislature also began work on wildfire relief measures during a special session held in October.
The Oregon House of Representatives approved a wildfire relief bill Thursday that would allow homeowners to prorate taxes on property destroyed or damaged by last year’s devastating blazes. House Bill 2341, sponsored by Reps. Pam Marsh (D-Southern Jackson County) and David Gomberg (D-Central Coast), was heard in the Senate Monday.
“Last year’s wildfires were devastating and continue to impact families across the state,” Marsh said. “With bipartisan support, HB 2341 provides some much-needed financial relief to home and business owners worried about paying their bills.”
Lawmakers on both sides of the aisle say HB 2341 has support in the Senate.
“I have met with people in my community that literally lost everything to these fires,” said House Republican Leader Christine Drazan, (R-Canby), in a statement. “I know that this bill can make a big difference, and I hope it is just the beginning.”
The Oregon Legislature is also discussing HB 2607, which would exempt homeowners rebuilding their homes from a 2008 school tax on new construction; SJM3, which recommends the federal government reimburse state and local governments for property tax losses on private land resulting from fires that started on federal lands; and HB 2630, which would maintain school district funding, even in the event of student enrollment declines, at school districts affected by wildfires.
Moody’s affirmed the A2 rating on one Oregon town,
S&P Global Ratings had placed Phoenix and Phoenix-Talent School District No. 4 from credit watch with negative implications in September, but revised the outlook to stable in January and affirmed the school district's A-plus rating "saying the fires that devastated much of the school district's service area doesn't appear to have materially negatively affected its credit profile."
California has a law that school districts are held harmless for enrollment losses two years out from a fire and the state Legislature has regularly backfilled property tax losses for local governments in fire-devastated areas over the past several years. Those measures have helped most localities and school districts maintain their ratings.
