Palin hiring freeze raises questions

Despite doubts about existence of deficit, top leaders in Legislature support freeze

Posted: Sunday, January 25, 2009

A plan by Gov. Sarah Palin to save money by imposing a state employee hiring freeze is raising questions, but lawmakers are doing little to stop it.

Brian Wallace / Juneau Empire
Brian Wallace / Juneau Empire

Palin made the surprise announcement in her State of the State speech Thursday, but offered few details at the time. Questions also abound about how many job openings will be affected, with two officials in Palin's administration providing conflicting numbers, and also if the state does in fact have a deficit as advertised.

The freeze won quick support from Senate President Gary Stevens, R-Kodiak, and House Speaker Mike Chenault, R-Nikiski.

Mike Nizich, Palin's chief of staff, issued a memo to state agencies Friday on how the freeze would be implemented.

It didn't answer some lawmakers' questions about whether it was really needed, or whether there was even a deficit.

Declining oil prices will bring in less money this year than had been expected, but still much more than the cost of running government.

"With less revenue, we have an obligation to spend less money," Palin told the Legislature Thursday.

But on Friday, Department of Revenue Commissioner Pat Galvin acknowledged to legislators that the state would still be bringing in billions of dollars more than the state was spending.

It's being called a "shortfall," Galvin said, because it is less than what was expected and budgeted for. The surplus goes into savings, but that amount will be less than expected.

Rep. Les Gara, D-Anchorage, referred to "fake deficits" at a House Finance Committee meeting Friday.

Galvin called it a "semantic game," but acknowledged that it did get confusing.

"We all put a lot of money in savings last year," said Rep. Mike Hawker, R-Anchorage, co-chair of the committee. "This billion dollar shortfall means we're actually going to save a little bit less than we hoped to."

"That's one way to put it," Galvin added.

The Palin administration said it was unable to say how much the hiring freeze would save.

Sen. Lyman Hoffman, D-Bethel, supports the freeze, calling it "a good first start."

Hoffman, who co-chairs the powerful Senate Finance Committee, said it was not the fault of the Palin administration that they couldn't predict the savings, which will depend upon how many state employees retire or quit or are fired during the period of the freeze.

"I think that the rate that individuals terminate is just as predictable as the weather," he said.

Rep. Beth Kerttula, D-Juneau, said the administration should be able to make an estimate.

"They've had a hiring freeze before, they should be able to quantify it," she said.

Palin spokesperson Sharon Leighow said former Gov. Frank Murkowski instituted a hiring freeze in 2003, but was unable to provide any details about it.

State officials provided conflicting information about how many jobs the freeze might affect. Office of Management and Budget Director Karen Rehfeld said there are currently about 1,500 unfilled positions from more than 17,650 state employees. Division of Personnel Director Nicki Neal said the state was currently advertising for 157 jobs, though some other listings have ended but the new employee has not yet been hired.

Chenault, the House Speaker, said the freeze might not provide significant savings, but it would be a good symbolic move.

"It puts out the message that we are in an economic crisis, and we need to control spending at the state level the best that we can," he said.

Juneau's Sen. Kim Elton, who likely represents more state employees than any other legislator, said the freeze approach is too blunt and does not take into account the importance of many other jobs.

"Hiring freezes don't prioritize, and it is a lazy way of saving money," Elton said.

"Does this mean we don't hire a bridge engineer if we need a bridge engineer?," he asked. "Does this mean that we don't hire a wolf biologist to help us get out of the morass of predator control or hire a public health nurse who is providing services to rural villages?"

Rep. Harry Crawford, D-Anchorage, said he's concerned that necessary staff won't be hired. He said he worked last session to increase staffing at the Department of Labor's Wage & Hour Division. One employee has already been hired, and the state is recruiting for two more, he said.

"The law is not being enforced," he said. "If we don't get those two people it's not going to be properly enforced."

Most legislators praised the speech, and few outside the Juneau delegation seem likely to challenge the hiring freeze.

Senate President Stevens called Palin's action Thursday "appropriately conservative," given the state's difficult financial situation.

Gara, however, asked Palin administration officials to "not run around talking about a deficit, if it is not really a deficit."

"It does confuse the public when we use the word 'deficit' when we put money into savings at the end of the year," Galvin acknowledged.

For some, the perception of a deficit might be a good thing.

"Our job will be harder if people think we have more money," said Rep. Bill Stoltze, R-Chugiak.

Nizich also provided details on what would be considered non-essential purchases, which Palin also restricted. It will be up to individual departments to decide what is non-essential, he said, but could include conference travel, administrative travel, subscriptions and supply or equipment purchases that can be delayed until July.

• The Associated Press contributed to this story.

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