Today, Governor Mike Dunleavy issued Administrative Order No. 358, directing all executive branch agencies to implement immediate cost control measures in response to declining oil revenue and tightening fiscal conditions.
Under the order, the State of Alaska will implement a statewide freeze on out-of-state travel, hiring, and the development of new regulations. The order is designed to reduce the impact on available funds, streamline government operations, and refocus state efforts on delivering core services that protect the health and safety of Alaskans.
“This is the right thing to do,” said Governor Mike Dunleavy. “Alaskans expect us to manage their resources wisely. With oil prices dropping and our savings accounts unable to carry us through even one year of full state operations, we have no choice but to act now. We will not stop fighting for better educational outcomes, safer communities, and stronger support for Alaska’s families – but we must do so with discipline and focus.”
Background
Over the past several years, oil production revenues, which once made-up 90 percent of Alaska’s unrestricted general fund, have fallen to approximately 40 percent. While high prices in FY2024 provided temporary relief, a recent decision by OPEC to increase global production has significantly lowered market prices. The Department of Revenue’s Spring 2025 Forecast anticipates oil prices to average $68 per barrel in FY2026, representing a 20 percent drop from the prior year and resulting in a revenue shortfall of hundreds of millions of dollars.
Meanwhile, the state’s primary savings accounts (the Constitutional Budget Reserve, Power Cost Equalization Fund, and Higher Education Investment Fund) hold a combined value that is insufficient to sustain one year of government operations.
Order Details
Effective immediately, the Administrative Order includes:
- A freeze on all out-of-state travel for state employees, regardless of funding source. Exceptions may be granted through a waiver process for essential public safety or mission-critical duties.
- A statewide hiring freeze, affecting all full-time, part-time, seasonal, and non-permanent positions unless they directly support public safety or essential services. Exemptions include law enforcement, 24-hour care facilities, and frontline positions at agencies like OCS and the Division of Public Assistance.
- A freeze on new regulations, allowing state agencies to concentrate on their core missions. This applies to all regulations not already out for public notice.
These actions apply to all executive branch agencies, departments, boards, commissions, and public corporations, and will remain in effect until rescinded.
To read the full Administrative Order, visit gov.alaska.gov/admin-orders.
