Earlier this year, we commissioned and published a report by Key Policy Data (KPD) providing an analysis of how much Alaska pays for its public employees, comparing their compensation to their private sector counterparts, and how many public employees work in Alaska compared to the national average. The results were sobering: Alaska’s public employees are paid 55% more than they would be in Alaska’s private sector while Alaska’s government employee to private employee ratio is 125% higher than the national average. That article can be found here.
The shocking overall conclusion was that in 2016, comparing Alaska to the national average, Alaska’s government workforce was too large and cost the state $1.7 billion more than it should have. State budget deficits resulting from 2013’s oil price collapse could have been a catalyst for undertaking measures to reduce government payrolls. Instead, while private employers made cuts to survive the state’s recession, government employees saw little impact.
Oil prices have largely recovered and new oil finds are beginning to flow through the Trans-Alaska Pipeline System meaning the state’s budget deficit problems are not as severe. For now. But Alaska’s boom-and-bust economy, so dependent on a single commodity, remains at risk of the next oil price collapse. Another risk is an ever-growing state government funded by high oil prices and full government coffers.