Alaska Governor Imposes Hiring and Travel Freeze Amid Fiscal Challenges

On Friday, Governor Mike Dunleavy announced a hiring and travel freeze across most state government sectors, citing “declining oil revenue and tightening fiscal conditions.” His administrative order restricts all non-essential out-of-state travel and hiring while also halting the development of new regulations. Law enforcement, care facilities, and frontline roles within agencies like the Office of Child Services are exempt from these restrictions, with travel waivers available for essential public safety duties.

“This is the right thing to do,” Dunleavy remarked. “Alaskans expect us to manage their resources wisely.” He noted that with plummeting oil prices and state savings unable to sustain even one year of operations, immediate action was necessary. The Department of Revenue’s latest forecast predicts oil prices will drop to $68 a barrel for FY 2025-2026, down from $85 two years ago.

Recent legislative tensions have also emerged as the Alaska House rejected a Senate budget version, primarily over the proposed $1,000 Permanent Fund dividend, favoring a larger $1,400 dividend instead. Dunleavy’s order is partly attributed to OPEC’s increased production, leading to a significant revenue shortfall.

The Governor continues to push for improved educational outcomes and support for families but emphasizes fiscal discipline. Controversy surrounds proposed increases in the state’s education funding formula, with Dunleavy previously vetoing a bill boosting the Base Student Allocation (BSA). He signaled potential vetoes for subsequent education funding bills unless they align with his policy preferences.

The Alaska Legislature recently approved a corporate income tax, marked as its first tax measure in years, along with other significant tax reforms affecting oil companies. Dunleavy has called for sustainable fiscal planning, urging lawmakers to collaborate on creating a long-term strategy to ensure Alaska’s economic stability.