JUNEAU — Gov. Mike Dunleavy on Friday announced a broad freeze on state hiring, out-of-state travel and new regulations as the state faces declining oil revenue and dwindling savings.
Under Administrative Order No. 358, all executive branch agencies must implement immediate cost-cutting measures. The order takes effect immediately and will remain in place until lifted.
According to a statement from the governor, the Department of Revenue projects oil prices will average $68 per barrel in fiscal year 2026, a 20 percent drop from the previous year. That decline is expected to leave the state with a revenue shortfall in the hundreds of millions of dollars. Oil production once accounted for 90 percent of Alaska’s unrestricted general fund revenue, but now makes up about 40 percent.
Meanwhile, Alaska’s primary savings accounts, the Constitutional Budget Reserve, Power Cost Equalization Fund and Higher Education Investment Fund, together hold less than enough to cover one year of state operations, according to the administration.
The order freezes all out-of-state travel for state employees regardless of funding source, with exceptions allowed through a waiver process for essential public safety or mission-critical duties. It also halts hiring for all full-time, part-time, seasonal and non-permanent positions unless the work directly supports public safety or essential services.
That includes exemptions for law enforcement, 24-hour care facilities and frontline staff at agencies such as the Office of Children’s Services and the Division of Public Assistance.
Additionally, the order stops work on any new state regulations not already out for public notice, allowing agencies to focus on their core missions.
The order applies to all departments, boards, commissions and public corporations within the executive branch.
The full order can be found at gov.alaska.gov/admin-orders.
