It's still the economy. Governors seeking re-election this fall are facing increasingly tough challenges from opponents who blame them for the economic woes battering states from California to Connecticut.

Even in races for open seats, those with ties to the outgoing administration are suffering as worries about budget gaps, tax increases and service cuts top the list of campaign issues. U.S. policy toward Iraq may be important in congressional races, but it doesn't figure in here.

"If the economy is bad ... it's an extremely difficult campaign for an incumbent," said Vermont Gov. Howard Dean, who is not seeking re-election but is helping fellow Democrats. "We've got people in trouble we didn't expect to be in trouble. But of course, so do the Republicans."

With 36 governors' seats up for election, the potential exists for sweeping change in state leadership. Like the economic pain for the states, criticism crosses party lines:

In Wisconsin, Democratic Attorney General Jim Doyle has blamed GOP Gov. Scott McCallum for a budget that faces up to a $2.8 billion shortfall in the next two years. Doyle has steadily led in recent polls.

In Connecticut, Democratic challenger Bill Curry's ads accuse GOP Gov. John Rowland of fiscal mismanagement: "Gov. Rowland, what did you do with all that money?" Curry has cut the two-term governor's lead in half, though he still trails.

In California, GOP challenger Bill Simon has attacked Gov. Gray Davis on a number of economic issues and has moved slightly closer to the first-term Democrat, trailing by 8 percentage points in last week's polls.

Though every race has its own dynamics of personality and politics, the budget is at or near the top of the agenda in those states along with Maryland, Colorado, Pennsylvania, South Carolina and more.

Few states immune

A September study showed a 13 percent decline in state tax revenues from the previous year, adjusting for inflation, the sharpest decline in at least 11 years. Personal income tax dropped by 22.3 percent; corporate income taxes declined 11.7 percent, according to the Nelson A. Rockefeller Institute of Government in Albany, N.Y. Only sales taxes saw a slight rise, 1.5 percent, due to tax increases.

In the year that ended for most states in June, 29 states cut spending plans and 19 dipped into reserve funds to make it through the year, according to the National Conference of State Legislatures. New estimates nationally won't be available for months, but analysts say more cuts are highly likely.

"It's bad," said economist Steve Cochrane, who tracks state finances for the Web site Economy.com. "There's hardly a state out there ... that's not facing a budget shortfall." Only a few states with energy resources buck the trend.

With elections five weeks away, economic troubles are likely to remain a big issue -- as they are in South Carolina.