Months before a high-profile group appointed by Gov. Tina Kotek is due to release recommendations for juicing Oregon’s sluggish economy, disagreements are spilling into the open.

Two labor-affiliated members of the 16-member Oregon Prosperity Council issued a report Tuesday evening, calling out what they said was a “low road” to economic growth they expect the council’s business-oriented majority to take.

“The Prosperity Council is at a crossroads: it must choose between taking the high or low road to improved prosperity,” the two council members, Robert Camarillo of the Oregon State Building Trades Council and Alice Dale, a consultant for the Service Employees International Union, wrote. “We choose the high road.”

The paper amounts to a retort to Oregon business groups that are making a hard push for a shakeup. A recent survey asking businesses for suggestions for improving the state business climate turned up bitter criticisms about overregulation and unwieldy taxes.

Meanwhile, some in the business world are pointing to a paper of their own. A newly released study from researchers at Reed College, Yale University and the University of New Hampshire found that a 2020 tax on high earners that funds free preschool in Multnomah County likely led wealthy people to move elsewhere.

The competing messages come at a notable time. As she launched her reelection bid last fall, Kotek said she’d grown concerned over negative economic indicators that have bedeviled the state: sluggish economic growth, rising unemployment, and signs that Oregon businesses are increasingly looking elsewhere when they plan expansions.

Mass layoffs at Intel and Nike, two of the state’s largest employers, helped pave the way for Oregon to lose more than 18,000 jobs than it gained in 2025. It was the only West Coast state to shed jobs, according to the U.S. Bureau of Labor Statistics.

Kotek convened the Prosperity Council in January, with direction to send her policy recommendations that would help shift that direction. The group is expected to deliver prescriptions by June 30, and lobbying over what the list will include, and how it will be received by policymakers, is in full swing.

The 17-page paper released by labor affiliates Tuesday — authored with help from a suite of progressive policy advocates and a Portland economist — argues that targeted tax breaks that are a bedrock of conventional plans to boost business activity will only harm the state.

In fact, the paper says, Oregon’s economic picture is sunnier than commonly depicted by business groups and news stories.

That argument relies in part on ratings by the Brookings Institution, which puts Portland in the middle of the pack of top metro areas when it comes to economic growth from 2014-24. The organization also rates Portland in the top 10 in terms of income and wealth growth. Notably, the decade Brookings uses to make those comparisons includes a period of surging pre-pandemic growth in the city.

The paper also argues that increasing worries about businesses fleeing the state are overblown, citing a 2023 study that concluded more businesses moved into Oregon than left in 2021. In the last year, concerns that Portland — a major economic driver in the state — could be entering a self-perpetuating “doom loop” has become a top argument for business groups.

“The ‘doom loop’ narrative, widely embraced by the business community, fails to stand up to the economic data,” the report says. It adds: “Just like any smart CEO, Oregon should pursue a strategy of its own and ignore the low road of doing everything other states do, just more cheaply.”

The paper concludes Oregon’s best bet for improving its economy is not through tax breaks many progressives oppose. Instead, it’s through boosting funding for K-12 schools, higher education and apprenticeships. The paper also calls for regulating artificial intelligence, weeding out underperforming business tax breaks and resisting attempts to reduce taxes on the wealthy.

The document’s authors take special issue with one of Kotek’s top goals in her prosperity effort: rocketing Oregon up business friendliness rankings put together by CNBC, the cable business news channel. The Beaver State currently sits at 39th overall. Kotek has said her goal is to get it into the top 10, an aim Camarillo and Dale view as misguided.

“Business climate rankings are negatively correlated with income levels, with high wage innovation-based industries, and quality of life,” the paper said. “In effect, business climate measures treat a bad climate for workers as a good climate for business.”

Joe Cortright, an economist who helped prepare the paper, acknowledged Thursday that the state’s economy had slowed. In his view, that’s a symptom of Oregon more quickly feeling a slowdown in the national economy — not an argument for wholesale change.

“It’s like, yeah you caught a cold, that doesn’t mean something is fundamentally wrong with your health,” Cortright said. “You caught a cold when it was winter.”

The relatively sanguine view of the state’s economy offered in the paper is a sharp contrast to the outlook of people like John Tapogna, executive director of the Oregon Business Council.

Last year, Tapogna, an economist, captured the attention of top policy makers with a presentation that argued the fundamentals of Oregon’s economy had shifted. The state can no longer count on seeing its fortunes surge when economic times are good, he argued. A retrenchment is necessary.

“We know where we stand at the moment, but what’s coming at us for the next 25 years?” Tapogna said Wednesday. “Are we in a strong position to be able to navigate it?” (Editor’s note: Tapogna is chair of OPB’s board of directors.)

While Cortright and others are wary that Kotek’s Prosperity Council will recommend wholesale tax changes, the group has offered no outward indication of what its suggestions will be. According to a press release, a council meeting in Pendleton this week discussed the results of the recent online survey — and tax changes.

“The Council is moving with urgency to turn what we’ve heard from Oregonians into actionable recommendations that will make a difference,” Kotek said in a statement Thursday.

One subject certain to come up for the group is the new study looking at the impacts of Multnomah County’s Preschool for All, which funds free preschool for children in the county. The program is funded by an income tax that kicks in when single filers make more than $125,000 and joint filers make more than $200,000.

While the new study acknowledged that the 2020 tax coincided with the COVID-19 pandemic, racial justice protests and other significant factors, it concluded that the Preschool For All tax likely had a role in spurring high earners to leave the county.

“All analyses point to sizable, statistically significant increases in out-migration from Multnomah after [Preschool for All], especially among households likely subject to the tax,” it said. “Substantial migration involved moving out of Oregon.”

The study suggested that the movement of high-income earners meant that taxpayers earning a combined $1.4 billion were no longer on the county tax rolls. Notably, it also found that increased out-migration due to the tax “may be dissipating.”

The study, released earlier this month, was being circulated among Oregon civic leaders Wednesday morning and is likely to fuel the debate over the program. Kotek is among the list of skeptics that have voiced concerns about the program’s impact.

“Nobody up until this morning had issued a report that was persuasive that that had actually happened,” Tapogna said Wednesday. “This morning’s report, I think, was the one that really nailed it.”

Others were skeptical.

“For god’s sake, the tax took effect in the pandemic,” said Chuck Sheketoff, former director of the progressive Oregon Center for Public Policy, who worked with Camarillo and Dale on the white paper. “Of course they are going to find some effect.”

News Source : https://www.opb.org/article/2026/04/16/oregon-economy-prosperity-council-kotek/