The state hiring freeze announced by Gov. Sarah Palin last month is likely to affect hundreds of jobs in Alaska's capital, totaling millions of dollars in payroll removed from the local economy, according to state officials.
The unexpected maneuver to help the state's budget overcome what is projected to be a $2 billion deficit, down from earlier projections of $7.5 billion of surplus revenue, was announced Jan. 23 during Palin's State-of-the-State address. That number was based on Alaska reaping the benefits of oil selling at $70 per barrel, nearly twice the current rate.
Of the 1,500 unfilled state jobs, only the 844 positions paid for solely through Alaska's General Fund will be subject to the freeze, according to Karen Rehfeld, Palin's budget director. Of those jobs, 360 are in Anchorage, 75 in Fairbanks and 205 are positioned in Juneau.
"We know (the state's budget) is going to be ... short this year, and we know we can't cut our way anywhere near that," Rehfeld said. "We've had a lot of discussion about keeping Alaska on track" by not imposing statewide layoffs.
Some positions, such as emergency responders and public safety jobs, are exempt from the freeze. Rehfeld said after exemptions are taken into consideration, only about 175 jobs in Juneau would still be affected by the freeze. Positions funded entirely through the federal government, along with Permanent Fund and Export Authority jobs, also are exempt.
Assuming the average state job pays about $50,000 annually, State Deputy Commissioner of Administration Kevin Brooks estimated about $3.6 million in payroll would be removed from Juneau's economy during the remaining five months of the fiscal year.
But that's not to say all of those jobs would have been filled even if there wasn't a freeze in place, another Palin staffer said.
Nicki Neal, the state's director of the Division of Personnel, said the 1,500 unfilled jobs, roughly 9 percent of all state positions, mirrors the vacancy rate for all of 2008.
The freeze could save about $12 million if none of the 844 positions are filled, Rehfeld said, putting state department heads closer to the $20 million savings goal Palin imposed last summer.
Palin supporters have called the freeze proper money management, though more critics have been speaking out against the freeze as of late.
Sen. Bert Stedman, R-Sitka, cautioned that Alaska should not cut jobs "to the point where we push the state into recession."