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Davis to Have Tough Go in Second Term

Governors of the nation's most populous states are often mentioned as potential presidential candidates, and Gov. Gray Davis was no different after his overwhelming election victory in 1998.

But the Democrat was barely re-elected Tuesday, and the prospect of more tough times in California have led some political analysts to conclude the governor's national star is descending along with his popularity at home.

"It's not a pretty sight,'' said Mark DiCamillo of the San Francisco-based Field Poll. "For his own political standing, it only looks like the clouds are darkening.''

The person generating the most national buzz from California a day after the election was not Davis, but actor Arnold Schwarzenegger — a Republican who led a successful drive for an after-school programs ballot measure and has toyed with running for governor in 2006. Schwarzenegger denied Tuesday that he was positioning himself for a gubernatorial race.

Davis, a career politician, was elected governor by a 20-point margin in 1998, taking control of a state with a booming economy and a treasury brimming with cash. He doled out dollars for popular projects such as school improvements, cut taxes and enjoyed high popularity.

But then the economy slowed, the state was hit with a costly energy shortage, and when the time came to stand for re-election the treasury surplus had turned into a $23.6 billion budget shortfall.

What followed was an ugly, mudslinging campaign with Republican businessman and political rookie Bill Simon that Davis won with only 47 percent of the vote to Simon's 42 percent. Four other relatively unknown candidates split the rest.

Davis now heads into his second term facing a budget deficit that is expected to exceed $10 billion. He may have to raise taxes and cut popular programs while attempting to tackle issues that matter to voters, including rapidly rising home prices, overcrowded schools and worsening traffic jams.

He must also work with a Democrat-controlled Legislature that has been lukewarm in its support. Democrats failed to capture the two-thirds majority needed to easily enact budget remedies, including tax increases, that Republicans have routinely blocked by withholding votes.

"The degree to which the governor is able to work with the new Legislature to overcome what are enormous structural problems in the budget is the degree to which he will be successful in his second term,'' said outgoing Assemblyman Fred Keeley, a Democrat.

Davis waged one of the most expensive non-presidential races in history, spending more than $68 million to mount an unrelenting advertising assault on Simon, the millionaire son of the late William Simon, treasury secretary to Presidents Ford and Nixon.

Simon, who had never run for public office before, spent much of his time on the defensive over a series of campaign blunders. Voters routinely indicated displeasure with both candidates in pre-election polls.

During the campaign, Davis said repeatedly he had no plans to run for another office during the next four years, leading to some speculation he may be looking ahead to a U.S. Senate run in 2006 when his term as governor is ending.

His unquestioned ability at raising huge amounts of campaign cash also has some experts speculating that he could seek a behind-the-scenes political role.

"You could stick him in the back room and he could raise the money, and then you could find somebody a little more appealing to put at the front of the ticket,'' said Bruce Cain, a University of California, Berkeley, political scientist.

But others speculate Davis is simply looking now to repair his legacy as governor.

"The fact of the matter is his standing with the public is at a historic low, and if you look at the near term future you really see no opportunities for him to revise that standing any time soon,'' said the Field Poll's DiCamillo.