Edward King, Chief Economist for the Department of Revenue, and Donna Arduin, Director of the Office of Management and Budget, speak to members of the media at the Capitol on Wednesday, March 6, 2019. (Michael Penn | Juneau Empire)

Edward King, Chief Economist for the Department of Revenue, and Donna Arduin, Director of the Office of Management and Budget, speak to members of the media at the Capitol on Wednesday, March 6, 2019. (Michael Penn | Juneau Empire)

Alaska’s top economist: Job losses won’t be as bad as predicted

Full PFD would soften shock to Alaska’s economy, Ed King says

No matter which budget solution the Legislature and Gov. Mike Dunleavy approve, there will be negative consequences for Alaskans. That was one of the messages delivered by the state’s chief economist, Ed King, Wednesday at the Capitol.

King was not able to get through his entire presentation on the economic effects of Dunleavy’s budget during the Senate Finance Committee meeting. King made his way through seven of 23 slides before a barrage of questions from the committee members prevented him from moving further.

Later during a press conference, King said a solution must be implemented because the state’s deficit will persist. But each solution has its drawbacks.

[Volatile oil market prompts conservative forecasts]

If government spending is reduced, then jobs will be lost and services will be lowered.

If taxes are raised, there will be lost economic activity and a lower standard of living.

If the Permanent Fund Dividend is cut, then there will be lost economic activity and a lower standard of living.

If assets are depleted, then there will be lower future earnings and bigger problems in the future.

The Dunleavy administration is proposing the first option, and job losses are inevitable, King said.

• Up to 1,000 state jobs could be lost, depending on how the Dunleavy administration’s privatization efforts fare.

• Up to 3,000 jobs could be lost in public schools, depending how the state’s 53 school districts approach the problem.

• Up to 1,500 jobs could be lost at the University of Alaska, and that largely depends on how the board of regents decides to implement cuts.

But how many more jobs could be lost as a result of the budget cuts? The Institute of Social and Economic Research, or ISER, has estimated that 14,272 more jobs would be lost in Alaska. This estimate is based on a study saying for every $100 million taken out of the economy, 892 jobs are lost (with $1.6 billion in cuts, 892 is multiplied by 16 to reach 14,272).

King argued this number is likely much higher than what would actually occur. Part of this is because full Permanent Fund Dividend of $3,000 should stimulate the economy and increase the demand for jobs. If Senate Bills 23 and 24 are passed, providing Alaskans with the payback dividend during the next three years, that stimulus could be larger.

King also said fiscal stability in the government is certain to attract more investment in Alaska and subsequent jobs. However, the length of time before new investment is attracted is unknown.

Department of Revenue Commissioner Bruce Tangeman, who was also at the press conference, was skeptical of ISER’s estimate. He pointed out that employment in Alaska did not see a drastic rise in jobs as the state’s operating budget grew by $5 billion between 2004 and 2014. Nor did Alaska see a dramatic decrease in jobs — it should have lost about 30,000 jobs by ISER’s estimates — since 2014. The state has cut about $3 billion from its operating budget since 2014.


• Contact reporter Kevin Baird at 523-2258 or kbaird@juneauempire.com. Follow him on Twitter at @alaska_kev.


More in News

The Norwegian Bliss arrives in Juneau on Monday, April 14, 2025. (Jasz Garrett / Juneau Empire file photo)
Ships in port for the week of April 20

This information comes from the Cruise Line Agencies of Alaska’s 2024 schedule.… Continue reading

A courtroom at the Juneau Courthouse. (Clarise Larson / Juneau Empire file photo)
Juneau man in prison on federal weapons charges gets 13 years on additional state charges

Clyde Pasterski, 44, was convicted by a jury last November for drug and assault offenses.

Protesters rally against the Trump administration’s deportation polices in front of the Alaska State Capitol on Feb. 5, 2025. (Mark Sabbatini / Juneau Empire file photo)
‘Just give us a chance’: One Juneau refugee family puts faith in God, another flees as departure orders arrive

Both families arrived legally; validity of demands by Trump administration to depart being challenged

(Michael Penn / Juneau Empire file photo)
Police calls for Wednesday, April 23, 2025

This report contains public information from law enforcement and public safety agencies.

Russell Benford, representative for Royal Caribbean Group, answers questions from Mayor Beth Weldon on Thursday, April 24, 2025. (Jasz Garrett / Juneau Empire)
Assembly tries to clear the air with cruise line officials as tensions rise about future projects

City leaders seek missing details from Royal Caribbean on proposed west Douglas port.

An officer from the U.S. Border Patrol’s Blaine Sector office, which has assigned two permanent officers to Juneau as of December. (U.S. Border Patrol photo)
Higher-than-normal border crossings north of Haines last month defy national trends

The number of passengers entering the country at the Dalton Cache border… Continue reading

The chairs of the Senate Finance Committee huddle for a discussion after introducing their draft operating budget, Thursday, April 24, 2025. (James Brooks/Alaska Beacon)
Alaska Senate committee’s draft budget cuts $206 million from House plan but still has deficit

Proposal eliminates proposals for new troopers, help for education and would cut prison space.

Liz Harpold, a staff member for Sen. Donny Olson (D-Golovin)​, explains changes to a bill increasing per-student education funding and making various policy changes during a Senate Finance Committee meeting on Thursday, April 24, 2025. (Mark Sabbatini / Juneau Empire)
Revised education bill with $700 BSA hike gets new policy measures, advances to Senate floor

Changes easing charter school rules, adding new district evaluations fall short of governor’s agenda.

Most Read