Alaska Governor Implements Hiring Freeze and Travel Restrictions Amid Budget Challenges
Juneau, AK — In a decisive move to address Alaska’s fiscal instability, Governor Mike Dunleavy signed an administrative order on Friday initiating a hiring freeze and imposing travel restrictions across most state departments. The order, effective immediately, prohibits out-of-state travel and halts hiring initiatives, as the state grapples with declining oil prices and production—a crucial revenue source.
This is the first hiring freeze since March 2020, following a significant drop in oil prices. The Governor’s order notes that while oil prices averaged nearly $85 per barrel in fiscal year 2024, new production decisions by OPEC have driven prices down significantly. The Alaska Department of Revenue anticipates a fall to $68 per barrel by fiscal year 2026, which could lead to hundreds of millions in lost revenue for the state’s general fund.
In the past, oil revenues contributed nearly 90% of the unrestricted general fund. Currently, this figure has decreased to around 40%. Although Alaska has reserve funds amounting to over $4 billion, the Governor’s Office warns that these resources are insufficient for sustaining state operations for an entire year.
The hiring freeze affects all state agencies, restricting the hiring of full-time, part-time, and seasonal positions. Essential roles, particularly those ensuring public safety, such as law enforcement and healthcare services, are exempted. In-state travel will also be limited to critical business, encouraging the use of remote communication tools.
The directive aims to align agency operations with core mission objectives and streamline expenditures, emphasizing the need for proactive measures to ensure fiscal stability as the state faces uncertain economic prospects. This order will remain in effect until further notice from the Governor’s Office.
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Photo credit mustreadalaska.com
