WASHINGTON, December 30 (Sputnik) — Falling global oil prices forced Alaska Governor Bill Walker to order state departments to recalculate their budgets in an attempt to save jobs, Walker's Press Secretary Grace Jang told Sputnik News Agency Monday.
"We asked department heads to evaluate all of the budgets, all of the projects and let us know by January 6 what it would cost to continue [them]," Jang said.
"Our first approach is to just tighten up belts, see where we can cut without laying anyone off, and then we will start from there," she added.
Alaska is a traditional oil state whose budget depends on gas and oil prices. With the latter hitting five-year low, Alaska is facing a $3.5 billion budget deficit – more than 50 percent of the state's current spending level, according to Governor Walker's memorandum.
Governor Walker and Lieutenant Governor Byron Mallott addressed the Alaskans through the government website and asked for their input on tough decisions.
"With oil revenue anticipated to drop in the coming years, it's time for Alaska to tighten its belt. While we continue to meet with budget experts from across the state, we also want to hear your ideas on how to efficiently reduce spending," their statement said.
Last week, Governor Walker issued an administrative order to stop non-obligated spending on six projects, including a small-diameter gas pipeline from the North Slope and the Kodiak rocket launch complex.
Despite the fact that oil prices have been declining over the last three months, the Organization of the Petroleum Exporting Countries (OPEC) decided in late November to keep production volumes unchanged. Following the move, global price on Brent crude plummeted to its five-year minimum of below $60 per barrel. OPEC's decision has contributed to economic problems in many oil exporting nations, including Venezuela, Iran and Russia.
Alaska government must clarify project priorities by the beginning of state's legislative session on January 20. The legal budgeting deadline is February 18.
