Weekly Wrap: Calif. Wildfire Costs Are Another Blow to Budget

By: - September 4, 2009 12:00 am

California’s week-long struggle to smother a wildfire offers a glimpse of how some states prepare financially for natural disasters.

The so-called Station fire north and east of Los Angeles has strained firefighters, threatened homes and added yet another burden on a state that is out of money and low on water. It needs both to fight a fire.

The state has spent more than half of its million emergency firefighting fund established just for this purpose, according to an account of the spending in the Wall Street Journal . The fund will dry up fast; the money is available in the current fiscal year, which is only two months old.

Gov. Arnold Schwarzenegger (R) set aside a million reserve in the budget separate from the firefighting fund. When officials drain the firefighting fund, they will tap the reserve. They would rather not do that at a time when all other state programs have been cut.

Some state officials are hoping the federal government will reimburse the state for firefighting costs, officials said.

The money concerns make for a bizarre scene described in the Journal account: “An army of accountants from federal, state and local agencies are embedded with firefighters at fire staging camps, keeping track of every dollar spent on meals, fire equipment and personnel. When the fire is out, agencies will figure out who gets charged for what.”

One plant closing does not mean North Dakota has joined the rest of the states in the recession. But it does prove that no state has escaped the human cost of the downturn.

For 35 years, the Bobcat Co., whose light vehicles, excavators and loaders are visible at construction sites and backyards throughout the world, has been a leading employer in North Dakota. Its world headquarters are in Fargo. Its Bismarck plant employs 475 people.

On Wednesday (Sept. 2), the company shut down the Bismarck plant, saying the recession has hurt sales. Most of the jobs will be shifted to Bobcat’s plant in Gwinner, N.D., 141 miles away. Bobcat earlier laid off 138 workers in Gwinner, who will get first crack at 390 jobs that now will be posted there, company officials said. About 150 nonmanufacturing jobs will stay in Bismarck.

Dave Kessel, a Bobcat welder for 35 years in Bismarck, said in an Associated Press interview that he will have to rely on his wife’s income because he is not moving. Sam Ude, also a welder for 35 years, said he probably would have to move to rural Gwinner to keep his job because no one would probably hire a worker in his 50s in Bismarck, North Dakota’s capital.

North Dakota has prospered from a booming oil industry and relatively high farm commodity prices. The housing crisis did not spread to the state. Outside its borders, though, the national economy has struck the state’s largest manufacturer. Said Rich Goldsbury, president of Bobcat Americas: “We are facing a huge economic challenge and we need to adapt.”

Russ Staiger, president and chief executive officer of the Bismarck-Mandan Development Association, told the Bismarck Tribune that Bobcat’s downsizing means “the golden bubble that we have been operating under has been burst. I think it brings us to the realities that the rest of the country has been experiencing.”

With the budget impasse over in Connecticut, Arizona and Pennsylvania are now the last states without final spending plans for the fiscal year that began July 1. In Pennsylvania, a new poll by Franklin and Marshall College shows Pennsylvanians are growing angrier about the breakdown. Residents’ ratings of state government are the lowest in the 17-year history of the F&M Poll. More people disapprove of Gov. Ed Rendell (D) since he was elected in 2003. Only one in three residents believe the state is headed in the right direction, the poll said.

The House Transportation and Infrastructure Committee has released an updated list of stimulus infrastructure spending by state, including estimates of how many jobs have been created or saved. Wyoming and Iowa top the list.

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Stephen Fehr

Stephen Fehr is a senior officer with Pew’s government performance portfolio. He is a lead writer on many of the products generated by the portfolio, specializing in state and local fiscal health.