The governor declined to take positions on issues such as tax changes ahead of any findings put forward by new economic council she convened

By Shaanth Nanguneri, Oregon Capital Chronicle

Oregon Gov. Tina Kotek kicked off her plan Thursday to jump-start Oregon’s economy alongside some of the state’s top business and industry leaders as the state continues to battle unemployment and slow economic growth.

The 16 members of Kotek’s “Prosperity Council” represent different Oregon regions and sectors such as labor, technology and construction, with businesses from a wireless health tech startup based in Eugene to the well-established Port of Portland. Kotek and newly-appointed Chief Prosperity Officer Tim Knopp, a former Republican state senator, joined them at the World Trade Center Portland, home to the state’s economic development agency, Business Oregon. 

Kotek officially announced the council in early December ahead of the annual Oregon Business Plan convention and in the face of Oregon’s economic growth lagging behind the national average for the past four years. The council she convened could offer her administrative or legislative policy change recommendations by June 30. 

Members heard a presentation on Oregon’s economy led by Michael Wilkerson, a partner and director of economic research for the consulting firm ECONorthwest. He noted that Oregon has been losing nearly $600 million per year in net income due to people leaving the state.

“This is just a start,” Kotek told members of the council. “If we’re successful in putting some actions in place in the next couple of years, we are going to grow the economy in a way that is going to serve the entire state, and our ability to provide services, our ability to make sure people have what they need.”

Kotek’s push to spur economic growth comes months ahead of the 2026 gubernatorial election in November, during which she will have to defend her record against what many business leaders say is an increasingly hostile climate in the state of Oregon due to regulatory and tax burdens. Meanwhile, her appeals to business groups and previous criticism of the high-income taxpayer-funded Preschool for All program in Multnomah County have fueled skepticism from more left-leaning advocates who have questioned her commitment to progressive values. 

The governor told the Capital Chronicle before Thursday’s meeting that she will be seeking from the Legislature a one-time funding allocation of $40 million for “new seed money” toward industrial land development. She’s also planning to introduce legislation to fast track the permitting process. Future proposals would likely center around growing jobs, additional tools to recruit and retain businesses and workforce modernization, she said.

A memo from Kotek’s office also lays out her wide-ranging legislation for an economic development package. It aims to take inventory of complex permits and fast-track approval for projects in Business Oregon’s targeted sectors, such as metals and machinery, forestry and wood products, bioscience and business services. Similar efforts have already been employed in Pennsylvania, Maryland and Michigan, the memo says.

Qualifying projects would have to seek approval by more than one state agency and investment minimums would be $50 million for projects in nonurban counties, $100 million in mid-sized counties and $150 million for projects in the Portland metro area. Another piece of her package would expand Oregon’s enterprise zone programs, which can help kickstart new business investments by easing local property tax requirements for a set number of years.

“Because of growth in the last decade or two has happened somewhat organically (through) relationships. Certain sectors like the semiconductor industry, we’ve attracted into an ecosystem that was already there,” Kotek said in a Tuesday interview. “But what I have seen over the last year or so in talking to businesses — this is going to take more concerted effort.”

Unemployment and population growth take center stage

Wilkerson’s presentation to the council noted that Oregon has experienced one of largest percentage drops in multifamily housing production compared to its pre-pandemic averages. Unemployment rates have also been higher in every county in the state compared to a year ago. He also said the “real challenge” is population growth.

“When you’re not growing your number of workers or your population, that productivity is the way that you raise income for growth,” he said. 

Thursday’s event also coincided with newly-released data from the Oregon Employment Department, which showed that Oregon’s unemployment rate remained higher than the national average at 5.2% in both November and December, the highest figure since 2021. Last month, the largest gains in the job market came from professional and business services as well as government jobs, while the most significant job losses were in the construction, retail trade and transportation, warehousing and utility industries.

Perhaps the most controversial appointment to Kotek’s prosperity council effort was Knopp, a Senate minority leader who in 2023 led  a six-week quorum-denying walkout over bills on gender-affirming care, abortion and guns. He was unable to run for reelection due to a 2022 voter-approved constitutional amendment which bars any lawmaker with 10 or more unexcused absences from serving another term. He gave no indication Thursday that those wounds still linger, however, thanking the governor for publishing a prosperity roadmap.

“He and I worked together when I was in the Legislature, and we negotiated across the table to build the Paid Leave Oregon program and the bill that passed in 2019,” said Kotek, who served as speaker of the Oregon House before winning election in 2022. “He’s a hard worker. He has a good attention to detail.”

Hiring Knopp has not shielded Kotek from pushback on the right, however. One of the governor’s top potential rivals for the upcoming 2026 governor election, Sen. Christine Drazan, a Republican gubernatorial candidate from Canby who came within a few percentage points of defeating Kotek in 2022, took a swipe at the council’s effort a day before Thursday’s meeting.

“As governor, it will be my job to be the ‘chief prosperity officer’ and lead our state towards becoming the best place in America to start and grow your business,” she wrote on X. “We’ll start (by) taking on Oregon’s hidden sales tax.”

Kotek, in the meantime, says she’s focused on delivering results. An often-cited July 2025 CNBC ranking listed Oregon at 23rd nationwide for the strength of its workforce, and she previously told business leaders in December that she wants to see the state rise to a slot in the top ten positions. Asked about potential changes to the tax system, she told reporters Thursday that she didn’t want to get ahead of her council.

“I don’t have any predetermined destination, but (what) we do know from other states is that they have targeted tax incentives or tax breaks,” she said. “That can be effective, and we have some here in our state as well, we just don’t have a lot of them.”

The prosperity council is an advisory body which is not open to the public by default, but Kotek’s office has said press will be invited to select events. The council’s next meeting is set to take place in Bend in February.

Shaanth Kodialam Nanguneri is a reporter based in Salem, Oregon, covering Gov. Tina Kotek and the Oregon Legislature for the Oregon Capital Chronicle. This story previously appeared in the Oregon Capital Chronicle.

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