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Study: Short-lived economic hit from wildfires

Past Southwest Colorado blazes indicate relatively small lasting impact
An economic study released by Fort Lewis College economics professor Tino Sonora found past fires in Southwest Colorado have had relatively small and short-lived economic impacts.

A Fort Lewis College professor has some hopeful news to those worried about the economic impact of wildfires: At least in Southwest Colorado, past fires have had limited and short-lived impacts.

In a study dated Aug. 27, economics professor Tino Sonora wrote, “Taking stock of the current fire (416 Fire) in La Plata County, relatively few structures have been damaged. The local economy was disrupted by evacuation calls, but as before, the largest impact will be the loss of tourist revenues, which we should know by the end of the year. Evidence from previous fires suggest the losses to the economy will be short-lived and relatively small.”

Income losses from fires, Sonora concludes, generally rebound within five years. “However, it should be noted that income would likely have been higher without the shock. Resources are spent on rebuilding rather than purely new investment.”

Sonora cautioned that wildfires in La Plata County occurred in relatively remote areas and have been far less destructive of existing infrastructure than wildfires in California.

“If a big one came into Durango, that would be a whole different can of worms,” he said.

The results seem to support views from economic development officials in the wake of the 54,129-acre 416 Fire, which started June 1 and was listed as contained July 31.

Social media helped keep people abreast of what was happening in Durango, assuring travelers that Durango was open for business, Frank Lockwood, executive director of the Durango Area Tourism Office, told City Council in September.

“Things bounced back really quickly,” he said.

Sales tax collections for the year for Durango through Oct. 31 are at $20.05 million, up 1 percent compared with year-to-date collections through Oct. 31, 2017.

Anecdotally, Sonora said he talked with several people in Silverton who felt more severe impacts from lost tourism during the 416 Fire, especially when U.S. Highway 550 was closed between Durango and the mountain town.

But he noted as of the end of October, Silverton was down only 4 percent on year-to-date sales tax collections compared with 2017.

Laura Lewis Marchino, executive director of Region 9 Economic Development District of Southwest Colorado, said, “What I like about this study is it takes out the emotion of what happened locally and looks at how long it has taken other Colorado communities to recover.”

Marchino said Region 9 receives numerous inquiries about the 416 Fire’s impact on the economies of San Juan, La Plata and even Montezuma counties. Currently, the impacts are hard to measure because some are over and some are still occurring.

“The impacts of the 416 Fire definitely depended on your physical location, and also whether the fire occurred during a traditionally busy or slow time of year for the business,” Marchino said.

Economic Effects of Wildfires
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Economic Effects of Wildfires (PDF)

Sep 21, 2021
Has snowy winter delivered economic rebound from 416 Fire?
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