Prosperity by Subtraction
Austerity, the human-capital trap, and the blueprint to dismantle the university as a public good
In June, Governor Tina Kotek’s Prosperity Council released its recommendations for Oregon’s economy. The report was presented as fresh thinking. In actuality, it is the latest chapter in a plan Oregon began nearly 30 years ago.
In the late 1990s, a gubernatorial task force on higher education and the economy urged Oregon to stop treating its universities as public institutions and start treating them as contractors selling services.1 The 2008 recession did not create that idea; it gave its advocates the opening to implement it. Between 2011 and 2014, the Legislature radically rewired the system through outcome-based funding contracts, the dismantling of the chancellor’s office, and the shift of power to institutional boards, all masked by a slow rhetorical shift from public “funding” to private “investment.”
Today, the Prosperity Council continues that project. It effectively revives the 1997 task force under a new name, drawing on the same business network, recycling familiar assumptions, and moving toward an identical end. What is new in the 2026 report is its bluntness. It openly concedes that Oregon has starved its universities, then recommends policies that would lock that starvation in place.
Echoes of 1997
The Council’s membership underscores the continuity of the project: decision-making on higher education is once again concentrated among business leaders, with no educators at the table. All but two of its members come from business, led by co‑chairs Renée James, founder of Ampere Computing, and Curtis Robinhold of the Port of Portland. These two are joined by executives from Tillamook, Columbia Sportswear, Hoffman Construction, and Schnitzer Properties. The only exceptions are two labor representatives, Robert Camarillo and Alice Dale, who dissented from the tax recommendations. No educator serves on the panel. The report itself was assembled with help from the consulting firm ECONorthwest and two communications agencies.
In its design and sponsorship, the Prosperity Council is essentially indistinguishable from the 1997 task force, operating within the same ideological ecosystem. The Oregon Business Council—whose Education Roundtable produced the white papers that, by the Council’s own account, laid the groundwork for the 2011–2014 reforms and introduced the 40-40-20 attainment goal—praised the new report as soon as it appeared. So did Oregon Business & Industry.3 The lobby that recast public support for universities as a private “investment” two decades ago is once again diagnosing Oregon’s economy and prescribing its cure.
From Citizens to Human Capital
The reforms of the past decade rested on one central reframing. A degree has always been an investment for the student, who trades tuition and time now for higher earnings later. What changed was the state’s posture: public “funding” became public “investment,” and the university’s worth was made to turn on a calculable economic return rather than on any public obligation. The Prosperity Council report simply extends that logic to its conclusion.
In the report, discussion of higher education is subordinated to a chapter labeled ‘Workforce’ and relegated to a section on ‘talent development,’ rather than placed within any dedicated examination of education itself. The university is listed there as a “critical driver of workforce development, research, innovation, and business growth,” aligned with “high-demand fields such as artificial intelligence, biotechnology, and semiconductors.”4 Nowhere does the report acknowledge a liberal arts education as a fundamental public good. Education appears as a pipeline, justified only by what comes out the other end.
Even the Council’s leading critic reasons the same way. Writing in The Oregonian, economist Joe Cortright urged the state to set aside tax cuts and invest in education instead, arguing that an educated population is the true source of Oregon’s prosperity.5 He is right about the policy and is nearly alone in saying so. Yet, he relies on the very rhetoric the reformers championed: the human-capital case, in which talent is a competitive advantage, and schooling is merely an economic input. It is the same rhetoric that helped turn a public good into a budget line.
This shared rhetoric undermines the Council’s case on its own terms. Even if one grants the premise that universities should be judged primarily by their contribution to economic competitiveness, the argument falters because of evidence showing that slashing taxes rarely delivers the growth it promises. More fundamentally, a university defended only for its “return” in the form of higher earnings or productivity has already conceded that it can be closed if those returns are judged inadequate.
A Receipt, not a Fix
What sets this report apart from earlier iterations of this agenda is that it acknowledges the conditions those reforms produced. In the talent chapter, the Council notes that Oregon “ranks 37th nationally in higher education appropriations per full-time student” and “invests 24% less per student than the national average,” and that this has produced “the highest average tuition and fees in the West.”6 In effect, the architects of this long-running disinvestment are finally cataloging their own handiwork.
Yet, having named the problem, the report makes repairing it the tenth of its ten priorities and the only one that pledges specific funding for universities. That pledge is $20 million per biennium for a research-commercialization fund. The constraint is neither money nor specificity: the same report commits $250 million per biennium to prepare vacant industrial land for commercial tenants—more than twelve times what it offers the universities it has just conceded it starved.7
Against a funding gap that leaves Oregon roughly a quarter below the national average, and with the highest tuition in the region, $20 million is a receipt, not a fix. There is no proposal to restore operating support, cut tuition, or expand need-based aid. The report admits that the institution is starving and then treats it as an afterthought.
The Austerity Reflex
Oregon’s current fiscal bind traces back to Measure 5, the 1990 property-tax cap that eroded the state’s capacity to fund schools and universities for nearly two decades before the Great Recession.8 The Prosperity Council does not confront that legacy; instead, it proposes to cut further.
Its near-term recommendations for the 2027 legislative session are a sequence of tax reductions: raise the estate-tax exemption to between $3 million and $5 million; restore a capital-gains break for investors in small-business stock, the lapse of which has preserved roughly $40 million in state revenue; and add new research tax credits. A fourth change to the Corporate Activity Tax, which funds Oregon’s schools, is supposed to be revenue-neutral; the other three have no such constraint. One of those three, the capital-gains break for investors in small-business stock, would especially reward transactions like the one its own co-chair completed last year: Renée James sold Ampere Computing to SoftBank for $6.5 billion in 2025. Broader tax restructuring is safely exiled to a working group scheduled to report in 2029.9
The report is unusually candid about where this all leads. A “more balanced” tax system, it says, “may require broader-based revenue tools that can be more regressive in isolation.”10 In plain language, that is a sales tax—a tax that falls hardest on people with the least money and is justified with the promise that later spending will make up for it.
The Council defends this shift toward a more regressive tax system by citing a comparison in which an Oregon filer earning $40,000 appears to face a higher effective tax rate than a similar filer in Washington. That claim leaves out property taxes and misses the main point: Oregon now has one of the least regressive tax systems in the country precisely because it has no sales tax and relies more heavily on income taxes.11 To align with Washington is to imitate the most regressive tax systems in the nation, where the poorest fifth of households pay more than three times the share of income that the richest one percent pays.12
The underlying ideology is a familiar austerity reflex: lower taxes will unleash growth. That is one claim for which we have an unusually clear test. In 2012, Kansas made deep cuts to business and income taxes. Economic growth lagged behind its neighbors and the national average, while state budgets experienced repeated shortfalls, prompting a Republican legislature to reverse the cuts over the governor’s veto. The Center on Budget and Policy Priorities concluded that the results lined up with the bulk of academic research and recommended that states focus instead on improving schools and infrastructure.13
The timing in Oregon makes the proposal even more striking. Governor Kotek’s office projects a $5.7 billion loss of federal funding in the 2027–29 biennium, much of it affecting the Oregon Health Plan.14 Despite this, the Council recommends cutting state revenue and urges the governor to “reject proposals that increase personal or business taxes and fees unless there is meaningful support from Oregon’s employers of all sizes.”15 In effect, it hands employers a veto over the state’s ability to survive its own fiscal crisis.
Oregon’s Shock Doctrine
Oregon’s university crisis was underway long before it was officially declared. The rhetoric of “crisis” has consistently served as a political tool, a way to present a long-planned agenda as emergency repair. This pattern is the “Shock Doctrine” of higher education in action,16 and the Prosperity Council leans heavily on that script. Its report opens with a dashboard: Oregon ranked 49th in employment growth, with unemployment at 5.2 percent and 41 percent of residents unable to afford basic needs.17 The distress is real. Its root causes, however, differ entirely from the report’s framing.
In classic Shock Doctrine fashion, the Prosperity Council seizes on a national jobs slowdown and heightened poverty to sell the same trickle-down tax program Oregon’s business lobby has pushed for 20 years. National job growth slowed significantly in 2025, falling from an average of 168,000 jobs a month the year before to 49,000—the weakest year outside a formal recession in more than two decades.18 Oregon’s numbers were further depressed by hard years at two major employers, Intel and Nike. The Council takes that national slowdown and a measure of poverty and recasts them as grounds for their familiar demands for favorable tax treatment.
The Council’s widely publicized listening tour does little to alter, and much to obscure, the continuity of its business-driven agenda. The Council may have held 66 listening sessions and collected a thousand surveys, but a panel drawn almost entirely from corporate executives was never going to deviate from its corporate imperatives.
We no longer have to speculate where this “talent pipeline” reasoning inevitably leads. In 2023, West Virginia University—the flagship campus in one of the poorest states in the country—shut down its entire department of world languages under a funding formula that rewarded degrees tied to defined workforce needs. The department was not losing money; it generated roughly $800,000 in net revenue per year.19 It was cut anyway, because its courses offered what the formula could not easily price. A program does not have to be failing to be eliminated; it only has to fall outside the scope of what the funding formula is designed to measure. A formula built on that single metric turns a university into a vocational school by another name, keeping the degrees it can price and discarding the rest.
That is where the Prosperity Council’s rhetoric points, no matter how often it invokes prosperity shared by all. The blueprint was drawn in 1997 and written into law between 2011 and 2014. It has now produced a report willing to concede the damage in one chapter and extend it in the next. What remains of Oregon’s public universities is being steered, on schedule. The Prosperity Council is not forecasting Oregon’s future; it is asking the 2027 Legislature to finish a plan begun in 1997: the public university remade as a workforce vendor, kept only for what the funding formula can price. The blueprint is complete. What remains is the vote.
Notes
1. Ramin Farahmandpur, “From Kitzhaber to Kotek: The Managed Demise of Oregon Public Higher Education,” Academic Gadfly, June 11, 2026, https://academicgadfly.substack.com. On the 1997 panel: Governor’s Task Force on Higher Education and the Economy, Higher Education and the Oregon Economy (Portland, OR: Oregon Business Council, 1997).
2. Oregon Prosperity Council, Recommendations for Oregon’s Long-Term Competitiveness & Prosperity (Salem, OR: Oregon Prosperity Council, June 2026), https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf. Council roster, p. 2; “Prosperity Council Support,” p. 32 (staffing by ECONorthwest, Gard Communications, and Sound & Vision Agency); labor members’ dissent, Chapter 2 (Taxes), “Dissenting perspective,” p. 20.
3. Oregon Business & Industry, “Policymakers Must Act Urgently on Prosperity Council Report,” June 25, 2026, https://oregonbusinessindustry.com/prosperitycouncilreport/. On the Oregon Business Council’s Education Roundtable and its self-credited role in the 2011–2014 reforms, see Farahmandpur, “From Kitzhaber to Kotek” (see note 1), and Oregon Business Council, “Policy Papers — Education and Talent Development,” https://orbusinesscouncil.org/policy-papers/policy-papers-education-and-talent.
4. Prosperity Council, Recommendations (see note 2), Chapter 5 (“Talent Development”), p. 30.
5. Joe Cortright, “Opinion: Oregon’s prosperity won’t be built on tax cuts,” The Oregonian/OregonLive, June 14, 2026 (updated June 15), https://www.oregonlive.com/opinion/2026/06/opinion-oregons-prosperity-wont-be-built-on-tax-cuts.html.
6. Prosperity Council, Recommendations (see note 2), Chapter 5, p. 29. The report’s “37th” figure tracks the FY2023 State Higher Education Finance (SHEEO) data; my earlier essay cited “32nd” from an April 2025 Oregon Capital Chronicle report using a different year and measure. Both figures circulate; the Council’s own number is used here.
7. Prosperity Council, Recommendations (see note 2), Chapter 5 (Recommendation 10), p. 30, and Executive Summary, pp. 6–7 (University Innovation Research Fund, $20 million per biennium). On the $250 million-per-biennium allocation to prepare industrial land for commercial tenants, see Prosperity Council, Recommendations (see note 2); and Dirk VanderHart, “‘Prosperity Council’ wish list for Gov. Tina Kotek: lower taxes, less regulation, more land,” OPB, June 25, 2026, https://www.opb.org/article/2026/06/25/prosperity-council-kotek-taxes-regulation-land/.
8. Farahmandpur, “From Kitzhaber to Kotek” (see note 1); Oregon Ballot Measure 5 (1990), property-tax limitation, Oregon Constitution, art. XI, sec. 11b.
9. Prosperity Council, Recommendations (see note 2), Chapter 2 (“2027 Legislative Session”), pp. 18–19. On the Qualified Small Business Stock provision and the roughly $40 million preserved by Oregon’s prior disconnection, see also Julia Shumway, “Kotek’s prosperity council pushes for lower taxes, fewer regulations,” Oregon Capital Chronicle, June 25, 2026, https://oregoncapitalchronicle.com/2026/06/25/koteks-prosperity-council-pushes-oregon-lawmakers-to-revisit-tax-cuts-leaves-details-up-in-air/. On co-chair Renée James’s sale of Ampere Computing to SoftBank for $6.5 billion in 2025, see “Prosperity Council’s Report Challenges Kotek to Signal That Oregon Is Open for Business,” Willamette Week (Oregon Journalism Project), June 25, 2026, https://www.wweek.com/news/state/2026/06/25/prosperity-councils-report-challenges-kotek-to-signal-that-oregon-is-open-for-business/.
10. Prosperity Council, Recommendations (see note 2), Chapter 2 (“Priority Recommendations”), p. 18.
11. Prosperity Council, Recommendations (see note 2), Chapter 2, pp. 16–17 (the effective-rate comparison, which excludes property taxes). On Oregon’s relative standing, Institute on Taxation and Economic Policy, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, 7th ed. (Washington, DC: ITEP, January 2024), https://itep.org/oregon-who-pays-7th-edition/; Oregon Center for Public Policy, “Oregon’s tax system weighs more heavily on the poor than anyone else,” January 9, 2024, https://www.ocpp.org/2024/01/09/oregon-tax-weighs-more-on-poor/.
12. ITEP, Who Pays?, 7th ed. (see note 11): in Washington the lowest-income fifth pay about 13.8 percent of income in state and local taxes against roughly 4.1 percent for the top one percent.
13. Center on Budget and Policy Priorities, “Kansas Provides Compelling Evidence of Failure of ‘Supply-Side’ Tax Cuts,” January 22, 2018, https://www.cbpp.org/research/state-budget-and-tax/kansas-provides-compelling-evidence-of-failure-of-supply-side-tax; see also “The Kansas tax cut experiment,” Brookings Institution, 2017, https://www.brookings.edu/articles/the-kansas-tax-cut-experiment/.
14. Office of Gov. Tina Kotek, preliminary analysis of the federal reconciliation law (H.R. 1), August 2025, projecting a $5.7 billion reduction in federal funds in the 2027–29 biennium concentrated in the Oregon Health Plan; reported in Dirk VanderHart, “Trump’s ‘Big Beautiful Bill’ will slash $15 billion in federal money to Oregon, Kotek says,” OPB, August 11, 2025, https://www.opb.org/article/2025/08/11/oregon-braces-impacts-trump-budget-cuts-billions-federal-money/.
15. Prosperity Council, Recommendations (see note 2), Chapter 2 (“2027 Legislative Session”), pp. 18–19.
16. Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (New York: Metropolitan Books, 2007). The reading of crisis as a political instrument is developed in Farahmandpur, “From Kitzhaber to Kotek” (see note 1).
17. Prosperity Council, Recommendations (see note 2), Executive Summary (“Top Challenges”), p. 4.
18. U.S. Bureau of Labor Statistics data as summarized in “December 2025 Jobs Report,” Indeed Hiring Lab, January 9, 2026, https://www.hiringlab.org/2026/01/09/december-2025-jobs-report/ (2025 monthly average of 49,000 jobs against 168,000 in 2024; 584,000 added in 2025, the weakest non-recession year since 2003).
19. On the West Virginia University cuts and the profitability of the world-languages department, see Farahmandpur, “From Kitzhaber to Kotek” (see note 1), and the sources collected there, including “West Virginia University’s Unprecedented Proposed Cuts Become Clear,” Inside Higher Ed, August 11, 2023, and reporting in West Virginia Watch (September 15, 2023; April 23, 2024).