Alaska has 2nd biggest state government

Posted: Wednesday, August 01, 2001

By one measurement, Alaska has the second largest state government in America.

The U.S. Census Bureau says 4.2 percent of the state's residents work for state government, a per capita rate exceeded only by Hawaii, at 5.5 percent. Delaware is third at 3.6 percent.

But the statistic is somewhat misleading, as state government in Alaska delivers many services that are handled locally in the Lower 48.

Of Alaska's 626,932 residents, 26,338 were employed by state government in March 2000, according to the census. That includes the judicial and legislative branches, and the University of Alaska.

At the time, the Republican majority in the Legislature was completing the final year of a five-year plan to cut $250 million from the state budget, including the consolidation of two state agencies. Meanwhile, high-tax states such as Minnesota and Massachusetts were employing only 1.8 percent of their residents.

While Alaska's high ranking and austere budgeting don't seem to match, there are unique aspects to Alaska that explain the disconnect, observers say.

"That's probably not so surprising because we're such a small state population-wise and we're so huge geographically," said Rep. Beth Kerttula, a Juneau Democrat. It requires more government workers to deliver services here because populations are separated by great distances, she said. Alaska has 1.1 people per square mile, compared to a national average of 79.6.

Without prompting, Kerttula guessed that Hawaii ranked No. 1 in state government employment. "We're the two newest states. We're geographically difficult."

Jim Duncan, the state commissioner of administration, said a weak private sector helps boost the state government profile.

"We just don't have the diversified economy other states have," said Duncan, a former Democratic legislator. "There's just not a lot of employment in this state."

Alaska also has a low percentage of people 65 years and older - 5.7 percent, vs. a national average of 12.4 percent. With fewer retirees than average, the percentage of people working would be boosted.

Alaska also provides some services other states don't, either because local governments handle them or there isn't the need, Duncan noted.

In Alaska, the state runs the entire court system. While there are borough governments, they don't have law enforcement and social services functions, as county governments do in the Lower 48. Welfare and other public assistance programs are administered solely by the Alaska Department of Health and Social Services. The Alaska Marine Highway System isn't unique - Washington state runs ferries, for example - but it's far from an ordinary function of state government.

Dave Donley, an Anchorage Republican who is co-chairman of the Senate Finance Committee, said Alaska's state government employment has been forced up by "terrible budgetary blackmail."

Minority Democrats have been able to exercise some leverage because a three-quarters vote is needed to tap the Constitutional Budget Reserve, a required step recently in balancing the state's general fund. This year, though, Democrats pressed for school construction and maintenance projects instead of new programs that would add to state payroll.

While Alaska is No. 2 in state government employment, "It'd be a lot worse if the Democrats had been in charge," said Donley, a former Democratic lawmaker.

Bill McAllister can be reached at

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