Oregon Gov. Ted Kulongoski delivers the state-of-the-state address at a City Club luncheon in Portland on Friday. AP Photo

PORTLAND - Declaring that the "worst is behind us," an optimistic Gov. Ted Kulongoski said Friday he would spend the next three years working to boost Oregon's economy and make government more efficient.

In his "state-of-the-state" address, made available to The Associated Press in advance, Kulongoski issued no major new proposals for dealing with the state's budget problems.

The Democratic governor said Oregon voters sent an "unmistakable" message when they soundly defeated the Measure 30 tax hike on the Feb. 3 ballot, a year after an earlier tax hike was rejected.

"They feel tapped out, unsure about what comes next for their job and their children, and skeptical that government is doing all that it can to cut costs," Kulongoski said in remarks prepared for delivery Friday to the Portland City Club.

"After two major tax battles in less than two years, the time has come to say: Time out!" he said.

He said a rising economy - and the state revenue that it produces - is the best way to ensure adequate funding for schools and other key programs.

Revenue estimates for state government crept up slightly in a quarterly report released last week, for now heading off additional cuts to services in the budget period that ends in mid-2005, he said.

And despite a recent "uptick" in the state's jobless rate - which has consistently been among the highest in the nation - the overall jobs trend in the past six months has improved, Kulongoski said.

"Major companies - including high tech giants like Sun Microsystems and Intel - are moving jobs from California to Oregon," he said.

The governor listed as one of his key accomplishments a restoration of bipartisanship in the State Capitol, which he said resulted in passage of some key bills to boost government efficiency in the 2003 Legislature.

Working with Democratic and Republican lawmakers, Kulongoski said he was able to win passage of bills to cut the costs of the Public Employee Retirement System, begin repairs of Oregon's crumbling roads and bridges, and boost tourism by enacting a hotel tax to fund promotion.

"Yes, we have our differences on some issues," he said. "But we negotiated and compromised - without the destructive partisan rancor of past years."

Looking to the coming year, Kulongoski said he would continue to work to improve the state's higher education system, provide research funding to boost Oregon's high-tech sector and streamline the state's business regulations to spur more investment in Oregon.

On the environmental front, Kulongoski said cleaning up the Willamette River will be a top priority over the next three years.

"I don't just mean parts of the river, I mean the entire river from the headwaters east of Eugene all the way to the Columbia," he said.

Such a cleanup will be a "huge endeavor" that will require additional federal help as well as from businesses and regional governments, he said.