HeadWaters Economics, who also just released this study on the potential economic impacts of a Badlands Wilderness east of Bend, has also released a new study on the potential for future development on fire-prone lands and the implications on future fire-fighting costs. The report, which addresses fire risk throughout the west, also as a section on Oregon.

The report concludes the following:

• Protecting homes is the most expensive part of fire fighting costs:
  A recent study by the Office of Inspector General found that the majority of the Forest Service’s
  fire suppression costs were related to protecting private property on the widland urban interface.
  According to Forest Service managers the estimated total cost of fighting large forest fires to
  protect private homes adjacent to Forest Service lands accounted for 50 to 95 percent of all costs,
  ranging from $547 million to $1 billion in 2003 and 2004.
• The cost of federal land fire management has more than tripled in the first half of this decade:
  A June 2007 report by the U.S. Government Accountability Office showed that appropriations
  for federal agencies to prepare and respond to wild fires rose from an average of $1.1 billion per
  year in fiscal years 1996 through 2000 to an average of more than $2.9 billion per year from
  fiscal years 2001 through 2005. Adjusted for inflation, this is the same as an increase of $1.3
  billion to $3.1 billion.
• According to the GAO there are three reasons for the increase costs of fighting fires:
  1. Increased fuel buildup due to past fire suppression
  2. Severe weather and drought
  3. A growing number of homes built in or near wildlands.

What this means is that proportionally more and more of the budget of federal agencies is spent on protecting private residences from fires. It's also recently been reported that the federal government is weighing the possibility of shifting some of the costs (pdf) of fighting these fires to local agencies. In Central Oregon, this means that development of the Skyline Forest, the Metolius and other forested areas with destination resorts, as well as the western expansion of Bend, are financially problematic for federal agencies for sure, and potentially for local and state governments as well.

Fighting these fires takes away from other elements of agency budgets as well, like trail maintenance and wildlife management, and the more homes that are build in the "Wildland Urban Interface" as its called, the worse this imbalance will become.