The Economic Toll of Harsh Winter Weather

March 18th, 2014

Snow days were the best when I was growing up in Milwaukee Wisconsin (where they get “real” winters more often than not).  We would build forts as tall as adults and trudge home hours later for hot chocolate and cartoons.  Fast forward decades and travel across country to Maryland, and this feels like the longest winter in years.  Abundant storms this year have forced many schools to close and employees to stay home because of dangerous travel conditions and power outages.  Yet vacation days are not the only casualties of this winter.  Working in emergency management grants and finance, I have seen the economic toll this harsh winter is taking not only on local resources, but across the country.

Salt – Slow Deliveries and High Expense

New Jersey is just one state that almost ran out of salt to melt snow and ice on the roads this winter.  In West New York, salt silos sit empty, and the city has been forced to mix salt with sand and “pretty much anything and everything we can get our hands on.”  Alternatives to mix with salt include cheese brine (Wisconsin of course), beer waste, and beet juice.  The price of salt has also increased to triple the normal cost in some parts of the country as well.

Government agencies buy salt in bulk to store for the winter, agencies must guess how much salt to buy every year, and apparently many agencies across the country underestimated how much they would need this year (after very mild winters in 2011 and 2012).  According to the Salt Institute, the conditions this winter that are driving demand for more salt are also making it harder to mine the salt and arrange for timely deliveries.

Residents are having a harder time finding salt for their driveways and sidewalks than agencies.  By February, eight Home Depot stores in the Baltimore County, Md. area were low on salt and the Glen Burnie Lowe’s was sold out.  Customers may also face space heater and shovel shortages, and as I found out by traveling to several stores one cannot find a single ice scraper for your car – so if your toddler tossed yours somewhere in the garage that is just too bad. One particularly inventive pool supply store in Gaithersburg, Md. is selling pool salt that they say can be used to melt ice.

Should agencies begin to purchase salt based on this year’s record snowfall?  In tough budgetary times it may seem like a waste during mild winters.  However, if salt sitting in silos can be used the following year, then holding a stockpile may not be a bad idea.

Low Income Home Energy Assistance Program (LIHEAP) Sapped

The winter storms came early this year and as the late season St. Patrick’s Day storm in Maryland reminds us, winter is not quite done with the region.  LIHEAP funds are distributed to low income families through state and local agencies for help with utility bills, the bulk of these funds are used to keep homes at a safe temperature during the winter months.  Many officials have been forced to supplement these emergency funds with state funding and they have called on President Obama to increase funding for the LIHEAP Program.  In response to the strain on states, the Department of Health and Human Services has “released an additional $454 million of financial year 2014’s total $3.4 billion in LIHEAP funding.”

This extremely cold and snowy winter has combined with soaring fuel costs and bottlenecks in the natural gas system, further adding to the strain on states and LIHEAP.  Unfortunately the average LIHEAP grant has been reduced since 2010.

Flight Cancelations: Loss of Money and Time

According to analysis by the Associated Press, done prior to the latest round of March storms, this winter has had the highest number of cancelations in more than 25 years.  In addition to being grounded because of ice and snow, airlines are quicker to cancel flights these days to avoid keeping passengers on the tarmac for hours in hopes that the weather clears, thus avoiding “potential fines of up to $27,500 per passenger or $4.1 million for a typical plane holding 150 fliers.”  New government rules also require that pilots be given more rest time, thus it is even more difficult to schedule irregular flights after back to back winter storms. This means that passengers may wait days instead of hours for missed flights and connections.

Refunds do cost the airline industry (January storms cost United 80 million in lost revenue) but cancelled flights save the airlines money in terms of fines, salaries, and fuel costs (for planes circling airports or idling on tarmacs, and deicing).  The bottom line is that the passengers pay for the brunt of these cancelations with lost time and productivity if these are work related trips.  The airlines, bolstered by high demand and high prices, will remain profitable despite the winter storms, but for the passengers, there is no offset for days spent sleeping at airports or trips that are completely derailed by the weather.

Cars and Roads

The severe winter and budget cuts not only have local jurisdictions scrambling to buy salt, but also keeping up with the demand to remove snow.  Snow removal budgets have been busted more than once this season and many jurisdictions may still need to use contingency funds. But 2014 has most notably been known in Maryland (and likely surrounding states) as the “Year of the Pothole.”

Pothole season will be exacerbated by the record cold and ice, and this year was especially tough on the h
ighway infrastructure
.  Extreme weather conditions followed by warm days will further strain budgets to fix roads as potholes will appear earlier this year and with more frequency. This is known as the freeze-thaw cycle and this year it is best described as “incessant.”

Jurisdictions in Maryland have been so strained to fix potholes that the Senate Budget and Taxation Committee has “approved a one-time $10 million grant to counties for pothole repairs” on March 7, 2014.

Individuals will also be forced to pay more for vehicle maintenance.  Hitting a pothole may cost you tires, detached wheels, cracked rims, and suspension problems.   AAA has had a record year in the District of Columbia and Virginia area responding to flat tires caused by potholes, and the resulting expenses may add up to 6.4 billion nationwide.

Winter 2014 has been expensive for state and local budgets as well as families across the region.  At least the kids enjoyed the snow days – hope they remember that when they are still in school this July.

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