Back Home, Palin Finds a New Landscape

Adored by many national conservatives, Ms. Palin is a prospect for a presidential run in 2012, supporters say. Caricatured by opponents, she is a candidate for political oblivion, say others.

Regardless, Ms. Palin told reporters the day after Election Day, “This has been all positive for me.”

Alaska, too, has been recast and amplified in the 10 weeks since Ms. Palin soared to national prominence as the Republican nominee for vice president, and the process has not necessarily been all positive.

Oil prices, which provide the bulk of state revenue, were well over $100 a barrel in late August when Ms. Palin left to campaign with Senator John McCain. Now they are slumming south of $60 a barrel, below the level required to balance the state budget. Increased scrutiny of Ms. Palin’s time as governor often painted an unflattering portrait of her administration. Investigative news reports have portrayed Ms. Palin as being consumed with personal matters and vindictiveness, particularly in the controversy over the firing of her public safety commissioner in what has become known as Troopergate.

Many Democrats, her allies in passing key legislation to raise taxes on oil companies and spur development of a natural gas pipeline, are outraged by her partisan attacks on now President-elect Barack Obama and on the tactics of the McCain-Palin campaign here at home.

Within the state’s Republican establishment — never Ms. Palin’s comfort zone — there is tension over the fate of Senator Ted Stevens, who was convicted last month of failing to disclose gifts and free home renovations he received. Ms. Palin called on Mr. Stevens to resign even as state Republicans urged his re-election. A preliminary vote count suggests he could win a seventh full term.

Even if Mr. Stevens wins, he could still be forced to resign, and Ms. Palin is widely viewed as a strong candidate to win his seat in the special election that would have to be held to replace him.

Ms. Palin has largely dodged questions about her long-term political future, and as she gets back to governing full time, few people know what to expect from her in the immediate future.

“She’s coming back to a whole different world from when she left,” said State Representative John Coghill, a Republican from North Pole who is chairman of the powerful House Rules Committee. “If she comes back with a puffed up ego there’s going to be problems. But if she comes back ready to work, that will be better.”

Ms. Palin, in an interview in her office on Friday, said she was ready to work.

“Now we kick in that fiscal conservativeness that needs to be engaged, and we progress this state with $57-a-barrel oil,” Ms. Palin said. She said the state would have to “be prudent with public dollars and provide services more efficiently than have ever been provided in the state of Alaska before.”

The price and production of oil determines state finances: taxes on oil bring in about 85 percent of state revenue. To balance the budget for the 2008-9 fiscal year, the price of oil needs to average $74 over the 12 months, said Karen J. Rehfeld, director of the state office of management and budget. If it falls below that average, the state could have to make emergency cuts or dip into a reserve account that contains several billion dollars. High prices early in the fiscal year may help keep the average up this year, but next year is another matter.

Ms. Palin, first elected governor in 2006, has governed only in times of budget surpluses, and lawmakers said they had many questions about how she would lead now.

“I just don’t know what kind of philosophy she’s going to have when she comes back,” said State Representative John HarrisJohn Harris, a Republican and the departing House speaker.

Noting that his chief of staff, John Bitney, was once the governor’s legislative director, Mr. Harris added, “We were just trying to figure out what kind of policy things the governor may want to address and we were kind of scratching our heads, because we don’t know.”

Mr. Harris was among several lawmakers who questioned whether Ms. Palin would spend the rest of her term, which ends in 2010, positioning herself to run for national office. Would she pursue a socially conservative agenda, promoting bills to restrict abortion or gay rights, issues she largely passed on in her first two years in office because she was trying to win support from Democrats on other issues? Would she move to the center? Would she continue to rail against “the old boy network,” stoking her reformist image at the expense of her fellow Republicans, whose party has been tarnished by corruption scandals, including that of Mr. Stevens?

Ms. Palin rejected the idea that she would be playing to a larger audience.

“My actions will continue to be first and foremost in good service to the state of Alaska,” she said in the interview.

But other than suggesting that cost cuts were to come, Ms. Palin did not hint at a broader agenda.

The governor is due to submit her 2009-10 budget next month, and neither she nor her aides offered specifics about what it might contain. The McCain-Palin campaign portrayed Ms. Palin as an energy expert, and one top priority Ms. Palin expressed well before she was selected to run for the vice presidency was to improve energy sources for different parts of the state. That includes finding cheaper sources of energy for rural villages, which often rely on inefficient diesel power, as well as for cities like Fairbanks, the state’s second largest, where utilities rely on oil and coal.

The state also faces questions over issues like financing Medicaid, increasing mining in environmentally sensitive areas and spending on transportation projects, as well as the complex negotiations involved in trying to develop the gas pipeline with the cooperation of the same oil companies whose taxes Ms. Palin has raised.

Ms. Palin’s partisanship on the campaign trail may be what most surprised people at home.

“She’s coming back to a divided state, where Democrats had supported her but they watched her for two months call the president-elect of the United States a terrorist sympathizer,” said State Representative Les Gara, Democratic of Anchorage. “She called him a socialist.”

Her partisanship also surprised some conservative Republicans, who were accustomed to feeling ignored while Ms. Palin nurtured alliances with Democrats and moderate Republicans. Now, some Republicans who have been at odds with Ms. Palin in the past are wondering if her partisan tone on the campaign trail might mean they will have her ear more than before.

“It appears that way,” said Mr. Coghill, the Republican from North Pole. Mr. Coghill said Ms. Palin’s emphasis on socially conservative issues on the campaign trail has helped persuade him that now is the time to ask Ms. Palin to actively support a bill that would require minors seeking abortions to notify their parents in advance.

“There are some people in our caucus who are skeptical” that Ms. Palin might ally herself more with Republicans now, Mr. Coghill said. “But they’re willing to take the chance, to step up and play.”

Ms. Palin suggested in the interview that how she ran for vice president would not shape how she governs Alaska.

“If anybody wants to try to criticize and say, ‘Oh, all of a sudden she’s an obsessive partisan,’ they’re wrong,” she said.

But she did allow that she thinks beyond her current role.

“Around every corner is something new,” Ms. Palin said, “so I look forward to seeing what happens next. But for now, it’s great to be back in the governor’s office.”