The solution to Oregon's economic crisis must help rural communities as much as it helps the Portland metropolitan area, incoming Gov. John Kitzhaber told business and political leaders Monday.

PORTLAND — The solution to Oregon's economic crisis must help rural communities as much as it helps the Portland metropolitan area, incoming Gov. John Kitzhaber told business and political leaders Monday.

Kitzhaber said government officials promoting job creation should remember that 15 new jobs in Coos Bay are similar in their local effect to 500 new positions in the Portland area.

"These goals have got to apply to all Oregonians," Kitzhaber said in a speech to the Oregon Business Council's annual Leadership Summit.

The summit organized community, business and political leaders to suggest ideas that might create jobs and improve the state budget situation. In a report prepared before Monday's conference, the group says government policy should be focused on job creation because getting Oregonians back to work — and therefore paying taxes again — will help the economy while also increasing state government revenue.

The report also recommends luring higher-wage jobs, another revenue-boosting solution as Oregon grapples with a $3.5 billion hole in the next two-year budget cycle.

Oregon's statewide per-capita income has declined relative to the rest of the nation since the end of World War II — a trend that reflects the long-term decline in timber and wood-products jobs.

Kitzhaber said Oregon is in a "death spiral" where declining revenue is forcing government to cut back on education and health care spending, which then makes it harder to recruit high-wage jobs and further reduces government revenue.

Lawmakers have spent too many years neglecting the state's fiscal health, Kitzhaber said.

"This is the legislative session where me must stop kicking the can down the road and start redesigning the way we provide public services in the state of Oregon," said Kitzhaber, a Democrat who will take the oath of office Jan. 10 for a third term as governor after spending eight years out of office.

After Kitzhaber's speech, state Sen. Bruce Starr, R-Hillsboro, said voters sent a clear message by electing a tied state House and a nearly tied Senate: "Having one political philosophy with their hands on all the levers of government is not a good idea."

"I think the stage has been set that we will work together and get the job done," Starr said.