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

Jasmine Chavez, a crew member aboard the Quantum of the Seas cruise ship, waves to her family during a cell phone conversation after disembarking from the ship at Marine Park on May 10. (Mark Sabbatini / Juneau Empire file photo)
Ships in port for the week of May 25

Here’s what to expect this week.

Wreath bearers present wreaths for fallen comrades, brothers and sisters in arms during a Memorial Day ceremony at Alaskan Memorial Park on Monday. Laying wreaths on the graves of fallen heroes is a way to honor and remember the sacrifices made. (Jasz Garrett / Juneau Empire)
Traditional Memorial Day ceremonies offer new ways to ‘never forget’ those who served

New installations at memorial sites, fresh words of reminder shared by hundreds gathering in Juneau.

Thunder Mountain High School graduates celebrate after moving their tassels to the left, their newly received diplomas in hand, at the end of Sunday’s commencement ceremony. (Jasz Garrett / Juneau Empire)
‘Forever a Falcon’: Thunder Mountain High School celebrates final graduating class

147 seniors get soaring sendoff during 16th annual commencement full of heightened emotions.

Seniors at Juneau-Douglas High School: Yadaa.at Kalé enter the gymnasium for their commencement ceremony on Sunday. (Mark Sabbatini / Juneau Empire)
JDHS graduates celebrate journey from virtual ‘pajama class’ freshmen to virtuous camaraderie

Resolve in overcoming struggles a lifelong lesson for future, seniors told at commencement ceremony.

Sierra Guerro-Flores (right) listens to her advisor Electra Gardinier after being presented with her diploma at Yaaḵoosgé Daakahídi High School’s graduation ceremony Sunday in the Juneau-Douglas High School: Yadaa.at Kalé auditorium. (Mark Sabbatini / Juneau Empire)
Alternatives are vast for Yaaḵoosgé Daakahídi High School’s graduating class

31 students take center stage during ceremony revisiting their paths at the school and what’s next.

The LeConte state ferry in 2023. (Lex Treinen / Chilkat Valley News)
Stranded Beerfest travelers scramble to rebook after LeConte ferry breakdown

Loss of 225-passenger ferry leaves many Juneau-bound revelers looking for other ways home.

A photo taken from the terminal roof shows the extent of the first phase of paving to accommodate large aircraft. (Mike Greene / City and Borough of Juneau)
Large-scale repaving project plants itself at Juneau International Airport

Work may take two to three years, schedule seeks to limit impact on operations.

Capital Transit buses wait to depart from the downtown transit center on Thursday. Route number 8 was adjusted this spring. (Jasz Garrett / Juneau Empire)
More service, visitor information helping Capital Transit to keep up with extra cruise passenger traffic

Remedies made after residents unable to board full buses last year seem to be working, officials say

(Michael Penn / Juneau Empire file photo)
Police calls for Thursday, May 23, 2024

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

Most Read