Alaska, Hurt by Weak Oil Prices, Looks to Lay Off Government Employees

Oil barrels and coins with a dollar sign isolated on white

Thousands Are at Risk of Losing Their Jobs 

As the price of oil has yet to recover, the Alaskan state government is struggling to address the deficit, which may result in thousands of workers being laid off if legislators cannot come to an agreement on a finalized budget.


A Department of Administration spokesperson, Minta Montalbo, told the Associated Press that about 17,000 state employees will be given notice in the near future. She said that at this moment, it does not appear that the budget will be finalized by then.

Workers employed by the state also received an email from Department of Administration Commissioner Sheldon Fisher, which notified them about their current situation.

The notices act as a 30-day warning to workers that they are at risk of being laid off should a budget not be finalized by July 1, which is the beginning of the new fiscal year.

This has happened in the past, with notices being sent in 2015 but ultimately rescinded after a budget deal was reached. But after years of suffering through weakening oil prices, lawmakers are struggling once again to come to terms with each other and finalize a budget that would effectively tackle the growing deficit in the state.

Alaska is one of several states that rely heavily on oil to provide revenue. Since the oil downturn, the state has struggled to maintain its services without inflating its deficit. As oil prices remain low, there is little chance that the government will be able to maintain its spending habits and will therefore have to cut jobs and services.

This is the latest in an ongoing movement across the U.S. where governments are forced to make hard choices, often resulting in a loss of jobs.
The current federal budget proposal will also harm several key services in Alaska, should the bill pass as currently planned. While that is highly unlikely, with Republicans in control of the House and Senate, there is a good chance that many provisions in the budget could be maintained, cutting off more services to Alaskans. Alaskan native communities especially will be negatively impacted should services from both the state and the federal government be cutback.

Source:

The Latest: Alaska Warns of Potential Layoffs,” U.S. News & World Report, May 30, 2017.

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