August 28, 2006
Alaska Governor Frank H. Murkowski on Firday lifted a hiring freeze put in place when BP announced on August 6th that it would be shutting down production at the entire Prudhoe Bay oil field. The hiring freeze covered all state jobs except those related to public health and safety and staffing 24-hour facilities.
"At the time we instituted this hiring freeze, we did not know how deeply state revenues would be affected," Murkowski said. "Nor did we know how long the Prudhoe Bay Unit would be out of production. With BP's decision to shut down the field one-half at a time and keep production at about 170,000 to 200,000 barrels per day, we are comfortable lifting the hiring freeze, and are doing so immediately."
Department of Revenue Commissioner Bill Corbus said his department now has a clearer picture of what Prudhoe Bay production will be. This allows a more accurate projection of the revenue surplus the state can expect, which provided the basis for the governor's decision to lift the hiring freeze.
"Our FY 2007 budget was based on a projected average price of $53.60 per barrel, and, of course, the price has been running over $70 per barrel," Corbus said. "We are now forecasting an available surplus of $308 million for FY 2007, as a combination of the higher price, the output of the field, and the passage of the new petroleum production tax, or PPT."
Murkowski said it is important to return state hiring policy to normal. "Even though the hiring freeze did not apply to the most essential positions within state government, at the time we instituted it we fully intended to remove it for all positions as soon as it was possible, to be able to effectively provide state services to Alaskans."
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