Catch-23

Any reporter approaching the 1800 block of Madison Avenue would reflexively double-check the itinerary. The crumbling, boarded-up rowhouses are a reminder that Baltimore's Madison Avenue is a far cry from New York's world-famous, upscale address. And even in Baltimore, the western reaches of Madison are a far cry from the bistros and museums that dot the same street further east, in the high-rent residential area known as Mount Vernon.

But there it is, in black and white: a block party at 1800 Madison Avenue. Bob Ehrlich, who hopes to be elected governor of Maryland in just under a month, is going to be stumping for votes here. One block to the south begins a long stretch of urban blight. One block to the north begins Bolton Hill, a historic district with a large gay population. No matter which way you turn, the area looks like a Democratic stronghold-and Bob Ehrlich is a Republican.

If this particular block party looks like an unlikely stop, it merely serves as a symbol for Mr. Ehrlich's entire campaign. Maryland, after all, is practically a wholly owned subsidiary of the Democratic Party. Liberal soccer moms in the Washington suburbs and blue-collar workers in Baltimore have ganged up on the GOP for some 40 years, electing a steady stream of Democrats at every level of government. Indeed, the last Republican to win the governorship was Spiro Agnew in 1966.

As recently as a month ago, few observers thought this year would be any different. The Democratic lieutenant governor was widely expected to move up to the top spot with little resistance, thanks to both her politics and her pedigree: As the eldest child of Robert Kennedy, Kathleen Kennedy Townsend seemed destined for greatness in a Democratic state like Maryland. Thanks to her name and her national connections, Ms. Townsend has raised nearly $7 million for her race, a state record. In early polls, she led Mr. Ehrlich, a congressman from the Baltimore suburbs, by more than 15 points.

Then, about two months ago, Ms. Townsend went into free fall, and polls now show the two candidates in a statistical dead heat, at about 44 percent each. Sensing an opportunity, national Republicans have moved the Maryland race to the top of their wish list. The Republican Governors Association has pledged part of its $25 million war chest to the Ehrlich campaign, and President Bush on Oct. 2 raised nearly $2 million for the GOP hopeful in a 90-minute appearance in Baltimore.

Ms. Townsend, to be sure, bears much of the blame for her decline. A weak campaigner, she makes frequent verbal gaffes and seems wary of the news media. In searching for a running mate, she passed over several high-profile black candidates, potentially alienating the state's 30 percent minority population. Federal investigations into several programs she administered as lieutenant governor have further tarnished her image.

Still, Democrats in Maryland have managed to win elections with far more baggage than Ms. Townsend brings into the race. More than anything else, she may simply be in the wrong place at the wrong time. After years of robust budget surpluses, Maryland suddenly faces a deficit of $1.7 billion. In the state capital of Annapolis, the slowing economy caught free-spending lawmakers off balance, forcing unpopular proposals for higher taxes and cutbacks in spending. Mr. Ehrlich was in Washington dealing with national issues, so voters tend not to blame him for the budget mess. Ms. Townsend, however, has nowhere to hide: The swift economic reversal happened on the watch that she shared with her boss, Gov. Parris Glendening.

Ms. Townsend isn't the only Democrat whose gubernatorial dreams could be shattered by economic realities. In New Hampshire, where Democratic Gov. Jeanne Shaheen is leaving office with a $40 million budget shortfall, Republicans are poised to capture the governor's mansion with a businessman who promises to run a tighter ship. In Oregon, lawmakers mortgaged the state's massive tobacco settlement to cover a $482 million deficit. Democrats have held the state's top job for the past 12 years, but a voter backlash could elect Kevin Mannix, a pro-life, anti-tax Republican.

Even in Hawaii, which ranks with Massachusetts and Maryland as one of the most solidly Democratic states in the country, Democrats are running scared after running up a $300 million deficit. Democratic Gov. Ben Cayetano is retiring, but even one of the Democrats vying to succeed him admitted the state was on the verge of bankruptcy. Republican Linda Lingle, a former Maui mayor, has a healthy lead in the polls. She would be the state's first Republican governor since 1962.

For the GOP, that's where the good news ends among the nation's gubernatorial races. In a year of budget crises at the state level, Republicans are likely to be a victim of their own success. They currently hold 27 governorships, compared to 21 for the Democrats. (Maine and Minnesota have independent or third-party governors.) Republicans are the incumbent party in 23 of the 36 races on the line next month, while Democrats have just 11 states to defend.

In 12 of those Republican states, the incumbent governor is retiring, often leaving his party's nominee with a financial disaster to clean up. According to the National Conference of State Legislatures, total budget deficits at the state level will reach $57 billion next fiscal year. Because most state constitutions require a balanced budget, governors and legislators can't simply keep throwing money down a hole the way Uncle Sam does. When deficits appear, they have to be fixed in one-or at most, two-years. Short-term fixes like borrowing against a state's tobacco settlement or dipping into a rainy-day fund can only mask the problem for so long. Sooner or later, governors face the painful choice of raising taxes or cutting spending. So far, 16 states have taken the former route, while 26 have chosen the latter.

Neither choice, of course, is popular with voters. Even middle-of-the-road types who support the president's war on terrorism and want to see a get-tough majority on Capitol Hill may not be inclined to support GOP governors who've run up budget deficits closer to home. Because Republicans have more seats to defend this year, they have more to lose than Democrats, who haven't held a majority of governorships since 1994.

When it comes to governors' races, 2002 is starting to look a lot like 1994. Back then, there were 29 Democratic governors, 20 Republicans, and one independent. Bill Clinton was midway through his first term, the economy was shaky (inflation was the worry back then), and Congress was bitterly divided. By the end of election night that year, the GOP had pulled off an electoral coup, capturing 30 state capitals and grabbing the majority of governorships for the first time in nearly a quarter century.

Today's numbers are practically a mirror image of 1994: 27 Republicans, 21 Democrats, and two independents. This time it's George W. Bush who's halfway through his first term, but the economy is once again shaky, and the Congress is divided as closely as ever. No one is predicting the Democrats will pick up 10 seats like the Republicans did in 1994. President Bush, after all, is infinitely more popular than his predecessor was at mid-term. Still, a net Democratic gain is all but in the bag, and they'll likely re-take the title of majority party at the National Governors Association.

Although governors' races draw less attention, they look every bit as volatile this year as the bare-knuckled brawl for control of Congress. With less than a month to go before Election Day, 15 gubernatorial races are still within the margin of polling error, making them too close to call. Even more amazing, in 24 out of 36 races, the leader still polls less than 50 percent, meaning a late surge by the challenger could result in an upset.

A Democratic takeover in a majority of states would certainly upset TeamBush's plans for an easy reelection in 2004. Because they run statewide every four years, governors typically maintain a tighter political machine than officials at other levels. An incumbent governor's grassroots organization can turn out huge numbers of party-line voters, potentially tilting the scales in swing states with a rich cache of electoral votes. Among the races keeping the White House on edge:

Florida For TeamBush, no other race is as personal as this one. Taking down the president's brother Jeb Bush would be huge for the Democrats. He's had a target on his back ever since the voting-machine debacle of 2000, and a $1.4 billion budget deficit threatens social services important to the state's large retiree population. Democrats also have an edge in voter registration, so Republicans never feel completely safe in Tallahassee.

Besides his natural skills as a campaigner, Gov. Bush's biggest advantage may be lingering divisions within the Democratic Party. Janet Reno lost her primary bid to attorney Bill McBride by fewer than 6,000 votes, and both candidates spent heavily in the intra-party battle. The most recent Zogby poll shows Mr. McBride trailing Mr. Bush by 10 points, but the Republicans are still running scared. Mr. McBride, after all, has already shown he can come from behind: Just weeks before the primary, he trailed Ms. Reno by 13 points.

Pennsylvania When President Bush tapped Tom Ridge as Homeland Security chief last year, he may have undermined his own security. The abrupt departure of the popular Pennsylvania governor set off a scramble in Harrisburg. Interim Gov. Mark Schweiker announced immediately that he wouldn't seek a term of his own, and Attorney General Mike Fisher eventually emerged as the Republican nominee. Carrying the banner for the Democrats is former Philadelphia mayor Ed Rendell, a bitter partisan who also chaired the Democratic National Committee.

Republicans in the statehouse this year managed to close a $1.3 billion budget deficit, but only with a huge increase in the cigarette tax and a bunch of one-time fixes. Deep fiscal problems remain, and next year's deficit is projected to be $1.8 billion. Voters appear to be tired of GOP control: Mr. Rendell leads the race by 16 points, and the Fisher campaign seems to be fading. Democrats are already engraving the plaque on this one.

Michigan After 12 years of GOP control, this important swing state looks ready to swing back to the Democrats. Attorney General Jennifer Granholm has galvanized support among suburban soccer moms in her bid to be the state's first female governor, and she leads Lt. Gov. Dick Posthumus by 12 points in the latest polls. Mr. Posthumus is getting some mileage from a leaked memo that shows Detroit Mayor Kwame Kilpatrick promised black support to Ms. Granholm in exchange for political patronage, but it may be too little, too late. The memo hasn't eroded Ms. Granholm's support among suburban women, and she's making gains with urban union households, as well.

Wisconsin It's been nearly two years since Gov. Tommy Thompson left Madison for a slot in the Bush cabinet, but his Republican successor, Scott McCallum, hasn't managed to endear himself to the state's ticket-splitting voters. Facing a $1.1 billion budget shortfall, he has refused to sign a "no new taxes" pledge, and only 37 percent of Wisconsin residents view him favorably. He trails his opponent, Attorney General Jim Doyle, by 11 percentage points. Further complicating the election is Libertarian candidate Ed Thompson, the former governor's brother. He's polling 7 percent, and most of his support appears to come from voters who would otherwise back Mr. McCallum.

Illinois Politicians pay big bucks to earn statewide name recognition. But for Republican Attorney General Jim Ryan, high name recognition is actually a curse. Polls show that voters confuse him with current Gov. George Ryan, the subject of a federal bribery investigation. Both men are Republicans, but the would-be governor has taken great pains to distance himself from the sitting governor-not an easy task when his opponent, Rep. Rod Blagojevich, is spending millions on ads that link the two.

Besides the bribery scandal, Gov. Ryan (who is retiring) is unpopular due to the state's budget crisis. Illinois is about a billion dollars in the hole, and after 25 years in power, Republicans catch most of the blame. Although polls show him on the rise, Jim Ryan still trails his rival by nearly 10 points.

California If ever there were a state where a budget crisis should cost the governor his job, California would be the place. After four years in office, Gray Davis has managed to spend his state into a $26 billion hole. With higher taxes and scaled-back services on the horizon, even Democrats were once talking about abandoning their governor.

But the Republican nominee, millionaire businessman Bill Simon, has polarized Californians and sent many centrist voters scurrying back to the Democrats. Despite the budget mess and lingering questions about his fundraising, Gov. Davis has managed to scare socially liberal Californians with charges that Mr. Simon is a "true-blue, think-tank conservative, a son of the first family of the far right"-particularly on issues like abortion, gun control, and the environment. By raising more than $65 million to get that message out, Mr. Davis has opened up a 10-point lead in the polls, and the national GOP has all but given up on the race.

Still, those national leaders may be underestimating the political power of a state budget crisis. Until two months ago, after all, they'd given up on Maryland, as well.