Whoever emerges as governor of California will have a tough time fulfilling campaign promises. The state faces an $8 billion deficit, persistent unemployment, struggling schools, and, as Gov. Gray Davis (search) knows all too well, angry and mobilized voters.

"I guess it's fun during the campaign, but it's going to be a grind once they get in there. It's a miserable job that everyone wants," said Bob Stern, who heads the nonpartisan Center for Governmental Studies (search) in Santa Monica, Calif.

The state has been hit hard by the downturn in the economy and the burst of the high-tech bubble in particular. A total of 223,900 jobs were lost from 2001 to 2003, causing a precipitous drop in personal income tax and sales tax revenue — the main sources of income for the California's $71 billion budget.

The result has been cutbacks and higher fees for such things as health care and education. Teachers are being laid off, classrooms are overflowing, and clinics for the poor are being shuttered.

Any budgetary solutions to these problems will need two-thirds approval from a state legislature that is more polarized than ever after the wrenching recall campaign.

Moreover, there is only so much room in the budget for creative problem-solving, since a series of voter-approved "lockboxes" mandate how money must be spent in certain areas, and the 1978 tax revolt known as Proposition 13 (search) limits property tax increases to 2 percent a year.

"The overarching problem is structural, and that's a really tough challenge that won't be fixed by anyone who sits in the governor's office," said Jean Ross, executive director of the California Budget Project (search) in Sacramento, Calif. "At some point we're going to have to reform the way in which we craft budgets in this state, and that's going to be painful."

The leading contenders for the job face their own unique challenges as well.

Republican Arnold Schwarzenegger (search), the front-runner in the race to replace Davis, has seen his image and his mandate to clean up Sacramento tarnished by accusations that he groped and sexually harassed 15 women.

Schwarzenegger has apologized and denounced some of the accusations as dirty politics, but he probably will not escape the controversy if he is elected governor.

Attorney General Bill Lockyer (search), a Democrat, said Schwarzenegger should volunteer for a state investigation regardless of the outcome of the election, although the one-year statute of limitations for sexual battery has expired on all the complaints.

And Democratic Assemblyman Mark Leno said he would introduce legislation he dubbed "Arnold's Law" to increase the penalties for sexually harassing women in the workplace.

"I don't think these sex harassment allegations are going away. He's going to keep being flayed by them. Maybe they're like mosquito pricks, but they're still there," said Edward Lascher, a public policy professor at Sacramento State University.

Schwarzenegger has said his top priority is to roll back a recent tripling of the vehicle registration tax. That alone would increase the budget deficit by $4 billion. His solution — to tax Indian casinos — would involve re-negotiating compacts with 61 tribes — a difficult task that will not be helped by Schwarzenegger's campaign advertisements criticizing Indian gambling. He also wants to renegotiate contracts with the state employees' unions.

If Schwarzenegger wins, he will also be confronted with an overwhelming Democratic majority in the Legislature and a considerable amount of ill will toward him. In addition, he will have only about two months to set up his administration before a budget is due in January.

If Davis survives the recall, he can expect minimal GOP cooperation and a continuation of all the problems stemming from the budget crisis that led to the recall campaign just a year into his second term.

"What they all have to hope for is a turnaround in the economy which will kind of buy their way out of the current crisis," said Walt Stone, chairman of political science at the University of California at Davis.

California's economy has begun to show some signs of recovery, including higher-than-expected bond sales and a growing number of new businesses. This year's turnaround in the stock market has also boosted the value of stock options for thousands of Silicon Valley workers.

Still, when it comes to fixing the budget, "all of the easy things have already been done," said Democratic Assemblyman John Laird. "I just don't think any of these candidates understand how bad it is, and how hard it will be to solve the problems."