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Kaboom or Kaput?

With one of the most severe droughts in history, at least 164 of Texas’s 254 counties banned the sale and use fireworks this 4th of July.  (The Texas Pyrotechnic Association helpfully points out that 99.4% of fires in the U.S. are not attributed to fireworks, but it’s that other 0.6% that most counties are worried about.)  And that spells trouble for fireworks sellers throughout the state.

Glenn Davis, of American Fireworks in Bastrop, says that his revenue is down 90% since the ban went into effect.  Davis manages 140 fireworks stands throughout Texas, and only 20 were still open for business by early July.

Jan Johnson, of TNT Fireworks, says that (perhaps a bit ironically) the majority of their patriotic American inventory comes from China.  They begin receiving fireworks as early as October in preparation for the following 4th of July.  While some states allow sales year-round, sales in Texas are only permitted from June 24-July 4, December 20-January 1, and May 1-5 (within 100 miles from the Texas-Mexico border).

Fireworks have no expiration date, but sales in December (or next May) won’t help pay the bills today.  Grippie Lawson estimates that selling fireworks requires an initial investment of approximately $10,000 per stand in order to cover the cost of insurance, inventory, salaries, and a competitive site.  In addition, the price of gasoline has inflated shipping costs, squeezing markups from about 200% down to 50-100% for any sales the stands did eke out.  To help offset their investments, Mr. W Fireworks pays operators a 15% commission on fireworks sold.  Those operators who own the land on which the stand is located receive an additional 10% commission.  But no fireworks sales = no moolah.

However, while Texas and other southern states clamp down on sales, some cities, counties, and states are relaxing laws to help their cash-strapped budgets, hoping to reap big tax revenues from the sale of fireworks.  A decade ago, consumer firework sales were permitted in only about half of the U.S. Today, only 4 states continue to ban firework sales:  New York, New Jersey, Massachusetts and Delaware.

Rhode Island and Arizona were the most recent states to lift their prohibitions, and Kentucky, Utah and New Hampshire have modified their laws to allow merchants to sell a broader variety of consumer fireworks than in previous years.

Many states maintain restrictions on sales. For example, in Florida fireworks can be bought only for special uses, such as scaring away birds from farms or fish, or for use as railroad signals. But the New York Times notes that fireworks stores in Florida abound – “apparently there are a lot of people signaling trains or scaring birds.”

And folks in more states buying more bottle rockets has meant a boom for fireworks sales.  Annual revenues have more than doubled from $425 million in 1998 to a record $952 million in 2010.  According to data from the American Pyrotechnics Association, consumer sales account for 85-90% of annual fireworks consumption and approximately two thirds of total revenue.

Despite the increase in use, fireworks-related injuries have declined.  There were approximately 8,600 injuries from fireworks in 2010, compared with 10,900 in 1991.  Bill Weimer, a vice president at Phantom Fireworks in Youngstown, Ohio, said the improved safety was a result of strengthened testing standards for the industry that took effect in 1994, and data from the American Pyrotechnics Association highlight the drop.

The APA further claims that fireworks-related injuries remain less than 3% of children’s injuries from outdoor activities during the Independence Day season (slightly lower than injuries attributed to swing sets).  Bicycles take the top prize, accounting for more than a third of injuries.

And it’s not just kids that the pyros are looking out for.  According to the Consumer Product Safety Commission, nearly twice as many people will be injured by their hair dryer / curling iron or by Christmas lights and decor.  So now that we’ve made it safely past the 4th of July, it’s time to watch out for those exploding Christmas trees.

Posted in Maps, Money, Various.