Gov. Arnold Schwarzenegger enters 2006 in a politically weakened position few could have imagined when he took office a little more than two years ago, the result of a disastrous shift to the right in a state dominated by Democrats and independents.

Facing re-election, the Republican governor has begun a swift transformation since November, when California voters rejected all four of his "year of reform" measures. The proposals included a spending cap, redistricting changes and restrictions on fundraising by public employee unions that Democrats had railed against.

"A move back to the center is essential," said Gary Jacobson, a professor of political science at the University of California, San Diego. "The election reminded him that California is not a Republican state. You don't win here by emphasizing your GOP agenda."

The governor has taken full responsibility for the initiatives' failure, dropped a legal challenge that had allied nurses against him and replaced his Republican chief of staff with a longtime Democratic activist. He has proposed an increase in the state's minimum wage and a freeze in student fees at California universities.

This week Schwarzenegger proposed boosting public school funding in an attempt to appease education groups that were among his most vocal critics last year.

His appointment of Susan Kennedy, a former aide to the governor Schwarzenegger replaced, Democrat Gray Davis, was Schwarzenegger's boldest move after his election defeat. It angered many conservatives but also helped him start restoring the bipartisan image that made him so popular with voters after the 2003 recall election.

His state of the state speech Thursday is expected to strike a far less confrontational tone than the last one. He touched off a year of bitter partisan politics in his 2005 speech by threatening a special election if the Legislature didn't meet his demands for a state spending cut, redistricting and other measures.

Thursday's address is likely to focus on bipartisan themes and also will call for a major bond measure that would provide billions of dollars for building roads and bridges, schools, low-cost housing and flood-control projects.

Schwarzenegger spokesman Rob Stutzman said the governor isn't moving to the political center as much as he is reasserting his core values.

"He doesn't have to move. He's been consistently in the center," Stutzman said. "It's just that the view was obstructed by the election and a $120-million-campaign spent against him to change the image."

He said Schwarzenegger is interested in ideas that Democrats also should champion, such as repairing the state's aging freeways, ports and levees and providing health care to low-income children.

Many of the issues the governor took on in 2005 were more divisive. He upset public employees when he proposed pension reform that jeopardized survivor benefits for the widows of police officers and firefighters. He angered nurses when he sided with the hospital industry in a dispute over staffing ratios, and he infuriated teachers with his positions on budget issues, tenure rules and merit pay.

Rejuvenating his bipartisan image is seen as essential to Schwarzenegger's re-election campaign in a state where two-thirds of voters are registered as Democrats or independents.

Two Democrats have emerged to challenge Schwarzenegger: state Treasurer Phil Angelides and state Controller Steve Westly. Both have raised millions, but also are short on something Schwarzenegger will never lack: name recognition.

Although Schwarzenegger's approval ratings have sunk, he remains an engaging campaigner, and he could see a boost from the state's improving economy. State finance officials are predicting California will receive $5.2 billion in unanticipated tax revenue next fiscal year.

Schwarzenegger's chances for re-election should not be underestimated, especially as he moves to regain his bipartisan image, said Leon Panetta, the chief of staff to former President Clinton who now runs a public policy institute in Monterey.

"On the Democratic side, it's an uphill battle for anyone who runs. I don't think it's a slam dunk at all," Panetta said. "Schwarzenegger has huge name identity, and that counts for a lot."