Capitol Hell: Worst states to govern--By MICHAEL FALCONE

Forget about the quandary South Carolina Gov. Mark Sanford faces as a result of his personal indiscretions.

Steep budget shortfalls, rising unemployment rates and intraparty squabbles are currently making life extremely unpleasant for most of the nation’s governors, many of whom are experiencing precipitous declines in their approval ratings.

Those dismal poll numbers are casting a long shadow over the 2010 elections when governorships in more than three dozen states will be up for grabs — not to mention the off-year contest in New Jersey, where one of the two 2009 gubernatorial races will take place in November.

While it’s a rough time to be running a state, in some places the outlook is really bleak. Here’s POLITICO’s list of the worst places to be governor.

California
At the moment, the Golden State is plagued by a list of maladies longer than its famed coastline — from a ballooning budget deficit to a worsening drought to sour relations between the Democratic-controlled state Legislature and Republican Gov. Arnold Schwarzenegger, and between Schwarzenegger and his own party.

The state, with its 38 million residents, is facing fiscal apocalypse. Somehow lawmakers and the governor will have to find a way to close a more than $26 billion budget gap — the nation’s most severe shortfall — but they can’t agree on the right mix of tax and fee increases and cuts in state services to do so. Republicans are balking at Democratic proposals to hike taxes on cigarettes and impose fees for oil produced in the state, while Democrats find Republican plans to cut social services unpalatable.

Earlier this year, Schwarzenegger was forced to lay off thousands of state workers and imposed mandatory work furloughs on others, amounting to a roughly nine percent pay cut. In May, the governor and the legislature suffered a stinging defeat at the ballot box when voters overwhelmingly rejected a series of initiatives that would have helped plug the gaping budgetary hole. On Wednesday, the governor declared a fiscal state of emergency and California began issuing IOU’s to pay its bills.

The term-limited Schwarzenegger, who swept into office on a wave of populist fervor in the state’s 2003 recall election, heads into his final year in office with his popularity on a downward slope. His approval rating — 34 percent — has reached an all-time low, according to a recent poll conducted by the Public Policy Institute of California.

New York
Sure, New York has a multibillion-dollar budget deficit and growing jobless rolls, just like many other states. But just when it looked like things couldn’t get any worse for Democratic Gov. David Paterson, that’s exactly what happened.

In recent weeks, the state Senate has been the scene of political mayhem caused by the sudden defection of two Democratic lawmakers who threw control of the chamber to the GOP. One of the party-switching legislators has since returned to the Democratic fold, but that has left the Senate evenly divided — a recipe for gridlock. Paterson has been trying to force both sides into an extraordinary session, even asking the state Supreme Court to intervene. But so far, the senators have come no closer to settling their differences.

Paterson hasn’t done much to help himself. Shortly after taking over for Democratic Gov. Eliot Spitzer, who became embroiled in a prostitution scandal, Paterson publicly admitted to his own extramarital affair. He was also criticized for his clumsy handling of the process to appoint a replacement for Hillary Clinton in the United States Senate. He chose a little-known upstate congresswoman, Kirsten Gillibrand, to fill the seat, after a tumultuous period of public sniping with Caroline Kennedy, who also sought the position.

A recent Siena College poll found that just 15 percent of New Yorkers would vote to reelect him in 2010.

Arizona
When President Obama tapped Gov. Janet Napolitano, a Democrat, to be his Homeland Security secretary, Arizona Republicans were thrilled. After all, Napolitano’s exit meant that Secretary of State Jan Brewer, a Republican, would be the next governor, handing control of both the executive and legislative branches to the GOP.

But Brewer has not exactly been blessed with a new era of party bonhomie. Instead, she finds herself embroiled in a fight that pits her against fellow Republicans who oppose her plan to raise taxes in order to ease the state’s roughly $3 billion budget shortfall.

Brewer went so far as to sue the GOP-controlled Legislature to force them into immediately sending her the budget lawmakers passed in June. The court only partially sided with Brewer, and as of this week, state legislators were still trying to iron out a budget compromise in order to avoid a government shutdown.

New Jersey
Democratic Gov. Jon Corzine is running out of time. Unlike most other incumbent governors up for reelection who have another year to start turning their state economies around, the New Jersey governor doesn’t have that luxury.

Corzine is facing a bruising off-year contest in the fall, and he has less than five months to convince voters to back him over former United States Attorney Chris Christie. Corzine has his work cut out for him: Recent polls show him trailing Christie by more than 10 points.

The national Republican Party, which is desperate to spark a political comeback either in New Jersey or in Virginia — the other state holding a gubernatorial election in the fall — has already signaled its intention to get involved in the race.

At the statehouse in Trenton, Corzine, who has never enjoyed particularly friendly relations with the Legislature, has been forced to make painful choices in response to the state’s slumping economy. He took heat for his failed attempt to generate more money from state toll roads in 2007, and recent budget cuts, which will affect funding to cities and towns as well as social services, aren’t likely lift his dismal approval ratings.

Meanwhile, Corzine’s Republican opponents are ready to throw the $29 billion state budget he recently signed back in his face. Not one GOP member of the Legislature voted for the spending plan, which includes income tax increases that could affect more than 61,000 upper-income New Jersey residents.

Michigan
Unemployment is rising everywhere, but it doesn’t get any worse than in Michigan. The latest U.S. Department of Labor report puts the jobless rate there at just over 14 percent, a bleak but not terribly surprising figure given the decline of the automobile industry. Even the federal government’s help for the troubled automakers has not been enough to staunch the bleeding.

Though many of the economic forces may be out of her control, the problem rests on the shoulders of Gov. Jennifer Granholm, a Democrat, who has been forced to make emergency budget cuts to keep the state running. And there appears to be little good news on the horizon in Michigan, which is expected to face a $1.7 billion drop in government revenue during the next fiscal year.

As a result, Granholm has been floating some unusual solutions to make ends meet, including offering to house prisoners from California in Michigan facilities — for a price, of course.

The tough choices she’s had to make show in her approval rating, which hovered around 33 percent in a recent Michigan State University poll. That’s not quite rock-bottom — Granholm hit 20 percent last year – but it still puts her in a tough spot. Granholm, who is term-limited, was often mentioned as an Obama short-lister to fill a United States Supreme Court vacancy, but the appointment never materialized.

Honorable Mentions

South Carolina
Until last week, GOP Gov. Mark Sanford was best known as the governor who led opposition to President Obama’s stimulus package and as a potential 2012 presidential contender. But it all came crashing down on June 24 when, after a mysterious five-day absence from the state, he admitted in a tearful press conference at the statehouse to an extramarital affair.

Now, instead of plotting his political future, Sanford is dealing with fallout from his sexual indiscretions, including calls by both Republicans and Democrats for him to resign.

Illinois
Democratic Gov. Pat Quinn, who succeeded Gov. Rod Blagojevich after his impeachment, walked into a political mess five months ago.

Upon taking office, Quinn was forced to contend with the Blagojevich legacy, which included the controversial appointment of Roland Burris to fill the United States Senate seat vacated by Barack Obama. Quinn called on Burris to resign, but to no avail.

In Springfield, the governor ran into further resistance when he proposed raising income taxes in order to shore up the state’s budget deficit. The Democratic-controlled Legislature is having none of it, and lawmakers instead handed Quinn a partial budget this week that makes drastic cuts in social services. The governor swiftly vetoed it.

With the two sides deadlocked, a government shutdown looms if they cannot negotiate a deal.

Nevada
GOP Gov. Jim Gibbons’s first term has been rocked by scandal, including accusations of sexual assault and a messy divorce from his wife, who said her husband has been unfaithful. In mid-June, Gibbons's chief of staff resigned, saying he was ready to "seek out new opportunities."

As if that weren’t enough, the governor has a contentious relationship with Democratic legislative leaders. Gibbons criticized the Legislature in June for “runaway” spending, and lawmakers overrode the governor’s veto of a bill to impose mandatory furloughs on state workers to help close the state’s $3 billion budget gap. Gibbons preferred an across-the-board 6 percent salary cut instead.

A recent Las Vegas Review-Journal poll found him with astonishingly low ratings. Only 17 percent of voters viewed Gibbons favorably, while 52 percent viewed him unfavorably, which explains why at least two challengers have surfaced for the GOP gubernatorial nomination in 2010: North Las Vegas Mayor Michael Montandon and former state Sen. Joe Heck.