That is NOT what ISER's report concluded: 

"When ISER compared reducing the number of state workers with reducing capital spending, and broad-based spending cuts, they concluded that cutting the PFD should be the last option used to help balance the budget because it has the largest negative impact on income and jobs." - from above article.

If you actually read the report, it clearly shows that reducing the number of state workers has the greatest impact on jobs. And if you think about it - duh - of course it does.. you're eliminating a job. Cutting the PFD does, however, have the largest direct impact on income loss. 

Also, the report does NOT conclude that cutting the PFD should be the last option used to balance the state budget. ISER was very careful not to direct the legislature in their decisions, but merely to provide objective analysis. 

Either the authors are deliberately misleading readers or did not read the report. Neither inspires much confidence.