Governor Mike Dunleavy of Alaska has announced Administrative Order No. 358, which mandates immediate cost control measures across all executive branch agencies due to falling oil revenues and tightening fiscal conditions.
The order implements a statewide freeze on out-of-state travel, hiring, and the introduction of new regulations, aiming to minimize the impact on available funds and streamline governmental operations focused on delivering essential services that safeguard the health and safety of Alaskans.
Governor Dunleavy emphasized the necessity of these actions, stating, “This is the right thing to do. Alaskans expect us to manage their resources wisely.” He noted the substantial decline in oil production revenues, which have dropped from 90 percent of Alaska’s unrestricted general fund to approximately 40 percent. Despite temporary relief from high prices in FY2024, a recent OPEC decision to increase global oil production has led to a significant drop in market prices, prompting the Department of Revenue’s forecast to predict an average price of $68 per barrel for FY2026—down 20 percent from the previous year.
The measures outlined in the Administrative Order include:
– An immediate freeze on all out-of-state travel for state employees, with exceptions for essential public safety tasks upon approval.
– A hiring freeze affecting all positions unless they directly pertain to public safety or critical services.
– A halt on the development of new regulations, allowing agencies to focus on their primary missions.
These actions encompass all agencies, departments, boards, commissions, and public corporations, remaining in effect until a decision is made to lift them.
The state’s savings accounts, including the Constitutional Budget Reserve and others, currently lack sufficient funds to sustain a full year of government operations, putting further pressure on the measures taken.
The governor’s proactive approach aims to safeguard essential services while navigating these financial challenges. This strategic focus on core services demonstrates a responsible commitment to prioritizing the well-being of Alaskan families and communities during difficult economic times.