After an eight-year hiatus from public life, John Kitzhaber took back the helm of a state reeling from joblessness Monday, pledging to focus on putting people back to work and raising wages.

SALEM — After an eight-year hiatus from public life, John Kitzhaber took back the helm of a state reeling from joblessness Monday, pledging to focus on putting people back to work and raising wages.

Kitzhaber's inauguration begins his unprecedented third term as governor of Oregon.

A former emergency room doctor who once called Oregon "ungovernable" as he finished what most people expected to be his final term in office nearly a decade ago, Kitzhaber laid out lofty goals to transform the way government thinks and operates.

Before he can get there, however, he'll have to tackle a $3.5 billion budget deficit.

"We should not underestimate the magnitude of these challenges; but at the same time we should never — never — question our ability to successfully meet them," Kitzhaber said. "I am here to tell you that we can and that we will."

Kitzhaber, clad in brown boots and blue jeans, a dark coat and red tie, took the oath of office alongside his girlfriend, Cylvia Hayes.

Accomplishing Kitzhaber's goals will depend on his ability to work with the 76th Legislature, which also convened for the first time Monday and which could be on course for gridlock.

The state House of Representatives is evenly split between Republicans and Democrats, with 30 members each. With no tie-breaking provision, no piece of legislation can get to Kitzhaber's desk without support from both parties.

Still, the House overcame a key hurdle Monday, successfully organizing to begin work after lawmakers voted 57-3 to approve rules governing the next six months.

Republican Bruce Hanna, of Albany, and Democrat Arnie Roblan, of Coos Bay, were elected co-speakers and will share the duties. Committees will be evenly split between Republicans and Democrats with a co-chair from each party.

Lawmakers elected Democrat Peter Courtney to a fifth straight term as Senate President. Nobody has ever been Senate president longer than four terms — a record held by several former senators, including Kitzhaber.

Kitzhaber's third gubernatorial election was his closest. He defeated Republican Chris Dudley, a political newcomer and former professional basketball player, 49 percent to 48 percent.

Kitzhaber's inaugural addressed focused largely on the economy and the state's precarious budget situation.

Oregon spends too much on fixing problems after they've arisen — on prisons, courts, foster care and other services — and not enough on investments like education, Kitzhaber said.

Kitzhaber said he would focus on creating jobs and raising per-capita income above the national average, focusing not on job growth in the Portland area but also in rural areas and in minority communities.

"I want, in fact I expect, to be held accountable by the citizens of Oregon for making significant progress toward that goal during my term," he said.

The new governor said he will announce some of his budget recommendations Friday.

"We have our priorities backward, and the central challenge facing Oregon today is to reverse this trend," Kitzhaber said.

Kitzhaber continued Democrats' dominance of the governor's office. The party has held the position since the 1986 election.

He takes office with a potential scandal already brewing. Outgoing Gov. Ted Kulongoski has appointed a retired judge to lead a personnel probe into the actions of four state workers who are accused of steering state money to a company run by Kitzhaber's girlfriend.

A probe by the state Department of Justice found no violations of the law. The latest probe will determine whether they violated employment policies. Kitzhaber has said his girlfriend, Cylvia Hayes, did nothing wrong and is not a target of the investigation.