Gov. Tina Kotek's economic advisers pitched Oregon lawmakers on tax cuts and infrastructure spending Tuesday, Sept. 8. The proposals aim to reverse a semiconductor employment slide felt across Hillsboro and Washington County.

Renée James, former Intel president and co-chair of Kotek's Oregon Prosperity Council, told the Senate Commerce and General Government Committee that Oregon is losing ground to states like Tennessee and Idaho. James founded Portland-based chip designer Ampere Computing in 2018 after leading Intel, the state's largest corporate employer.

"We're at this inflection point where we're not competitive with our neighbors who largely are ideologically aligned with us," James told lawmakers, according to the Oregon Capital Chronicle.

The council's June recommendations include raising Oregon's estate tax threshold from $1 million to $3 million, allocating $250 million every two years for business infrastructure and forming a work group to address the Corporate Activity Tax (CAT) by 2029. The CAT, established in 2019, is levied on Oregon commercial activity above $1 million and funds education statewide.

The proposals head to the 2027 legislative session. The Oregon Journalism Project estimated four of the major short-term tax cuts could cost the state up to $150 million.

Silicon Forest backdrop

The hearing comes as Hillsboro's tech economy faces deep uncertainty. Intel eliminated more than 6,000 Oregon jobs in 2024 and 2025, shrinking its Washington County workforce from about 23,000 to roughly 16,000. Edwards Vacuum announced in September 2025 it would shut down its Hillsboro production unit and cut 128 jobs near Intel's Ronler Acres campus.

Oregon's semiconductor workforce is at a 30-year low, The Oregonian/OregonLive reported. A July 2026 report commissioned by Business Oregon, the state's economic development agency, found the industry is "at risk of becoming an insignificant stakeholder" globally and faces "long-term stagnation" due to over-reliance on Intel, regulatory uncertainty and a shrinking supply of industrial land.

Not all the news is bleak. Semiconductor equipment maker Lam Research broke ground Aug. 26 on a $620 million research lab at its Tualatin campus, part of a $1.5 billion expansion expected to add 445 jobs paying an average of $173,000 a year. Lam already employs about 3,000 people in Washington County.

Pushback on tax cuts

Not everyone at the hearing agreed the council's approach would help working families. Alice Dale, a labor consultant for the Service Employees International Union (SEIU) and a council member, said the recommendations "harken back to trickle-down economics." She argued that raising the estate tax threshold would cost the state significant revenue better spent on education and job training.

Sen. Khanh Pham, D-Portland, said families in her district earning under $65,000 are asking how the proposals would lower their taxes.

Joe Cortright, who leads the Portland think tank City Observatory, noted that 95% of Oregon estates do not pay the estate tax and about 90% of businesses pay no CAT. He urged lawmakers not to make the tax system more regressive.

Sen. Christine Drazan, R-Canby, who is running against Kotek in the 2026 governor's race, said businesses she talks to are relocating to Tennessee, Idaho and Nevada, not to neighboring Washington or California.

Oregon's overall economy is growing closer to the national pace, state economists reported in August 2026. Revenue for the 2027-29 budget period is projected to come in $538 million above the previous forecast.

The prosperity council's proposals will be taken up when the Oregon Legislature convenes in January 2027.