Hiring freeze lifted

'Substantial vacancies' open in state offices

Posted: Sunday, August 27, 2006

JUNEAU - Gov. Frank Murkowski lifted a state hiring freeze Friday, 19 days after imposing it in the wake of BP's shutdown of the Prudhoe Bay oil field.

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The governor felt comfortable relaxing the freeze after BP announced it would shut down half the field at a time and maintain production of 170,00 to 200,000 barrels of oil a day.

"At the time we institute this hiring freeze, we did not know how deeply state revenues would be affected," Murkowski said, in a press release. "Nor did we know how long the Prudhoe Bay unit would be out of production."

The Department of Revenue now has a better idea of BP's expected production and the state's revenue surplus for fiscal year 2007, according to commissioner Bill Corbus in the release.

The FY 2007 budget was based on a projected price of $53.60 per barrel. Actual prices have been more than $70, and the Department of Revenue is now predicting a FY 2007 surplus of $308 million. Oil revenue accounts for 89 percent of the state's income.

The freeze pertained to all positions within the state except those in health and safety departments. It was unknown how many jobs were affected.

"It may have been hundreds," said John Manly, the governor's spokesman. "There's a substantial number of vacancies open at this point."

The governor's office heard from a few department commissioners who were trying to hire employees, Manly said.

"There were concerns that it was going to affect their ability to deliver services," Manly said.

"The whole point was not necessarily to save money," he said. "It was a management tool that we put in place because we didn't know how much of an impact the Prudhoe Bay shutdown was going to have on us. The first thing you do when you have a potential loss of revenue is put in place some kind of measure to keep a lid on spending."

The state's last hiring freeze was put in place in December 2002, when Murkowski first took office. That freeze only affected exempt and partially exempt employees.

"We were facing an $800 million deficit, and so we felt like it was important to say, 'Wait a minute, let's control this particular piece of the management.'"



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