Editing Gray Davis (section)

==Governor of California==
===1998 gubernatorial campaign===
{{Main|1998 California gubernatorial election}}

In the June primary election, Davis surprised political observers by handily defeating two better funded Democratic opponents: multimillionaire airline executive [[Al Checchi]] and Congresswoman [[Jane Harman]], wife of multimillionaire [[Sidney Harman]].<ref name="survival"/><ref name="Primary">[http://www.cnn.com/ALLPOLITICS/1998/03/26/calif.gov/ California Governor's Race Gets Tougher: Open primary makes it the most unpredictable contest in the nation] {{Webarchive|url=https://web.archive.org/web/20070605231426/http://www.cnn.com/ALLPOLITICS/1998/03/26/calif.gov/ |date=2007-06-05 }} by Schneider, Bill. CNN. Copyright © 1998 AllPolitics. March 3, 1998. Retrieved September 7, 2007.</ref> Davis's campaign slogan during the primary was "Experience Money Can't Buy." Early primary polls showed Davis in third for the Democratic nomination.<ref name="Primary"/> Davis surprised many political insiders with his landslide come-from-behind victory.<ref name="survival"/><ref name="Circus">Chorneau, Tom. "Davis campaign to run outside recall circus." Associated Press State & Local Wire. Tuesday, August 12, 2003. Copyright 2003 Associated Press. Accessed on LexisNexis on August 11, 2007.</ref> Davis even finished ahead of the unopposed Republican nominee in California's first [[blanket primary|blanket]] gubernatorial primary.

Davis won the 1998 general election for governor with 57.9% of the vote, defeating Republican Attorney General [[Dan Lungren]] who had 38.4%. Davis aimed to portray himself as a moderate centrist Democrat and to label Lungren a Republican too conservative for California and out of touch with its views on issues like guns and abortion.<ref name="Key states">[https://www.washingtonpost.com/wp-srv/politics/campaigns/keyraces98/stories/calif110498.htm In Key State of California, Democrats Bask in Victories] {{Webarchive|url=https://web.archive.org/web/20181215122654/https://www.washingtonpost.com/wp-srv/politics/campaigns/keyraces98/stories/calif110498.htm |date=2018-12-15 }} by Booth, William & Sanchez, Rene. [[The Washington Post]]. Wednesday, November 4, 1998; Page A29. Retrieved September 7, 2007.</ref> After his victory, Davis declared that he would work to end the "divisive politics" of his predecessor [[Pete Wilson]].<ref name="Key states"/> In his campaign, Davis emphasized the need to improve California's public schools, which voters had cited as their top concern in this election.<ref name="Key states"/>

===First term===
====Popular start and education====
In 1998, Davis was elected the Golden State's first Democratic governor in 16 years. ''The San Jose Mercury News'' called him "perhaps the best-trained governor-in-waiting California has ever produced."<ref name="Shining"/> In March 1999, Davis enjoyed a 58% approval rating and just 12% disapproval.<ref>[http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/1999/03/19/MN91497.DTL Voters Well Pleased With Governor's First 100 Days, Poll Finds 5-to-1 approval ratings put Davis on solid footing out of the gate] {{Webarchive|url=https://web.archive.org/web/20090122231403/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F1999%2F03%2F19%2FMN91497.DTL |date=2009-01-22 }} by Marinucci, Carla. The San Francisco Chronicle. March 19, 1999. Retrieved September 7, 2007.</ref> His numbers peaked in February 2000 with 62% approval and 20% disapproval, coinciding with the peak of the [[Dot-com bubble|dot-com boom]] in California.<ref name="bright"/><ref>[http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2000/02/16/MN5454.DTL Record-High Job Ratings for California Politicians] {{Webarchive|url=https://web.archive.org/web/20090122234441/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2000%2F02%2F16%2FMN5454.DTL |date=2009-01-22 }} by Gledhill, Lynda. ''San Francisco Chronicle''. February 16, 2000. Retrieved September 7, 2007.</ref> Davis held his strong poll numbers into January 2001.

Davis's first official act as governor was to call a special session of the state legislature to address his plan for all California children to be able to read by age 9.

{{cquote|"I ran for governor because of my passion for education," Davis told CNN the Sunday night before the recall election on ''[[Larry King Live]]''.<ref name="Shining"/>}}

[[File:Gray Davis, portrait.jpg|thumb|Davis's official photo portrait as governor]]

Davis used California's growing budget surplus to increase education spending. He signed legislation that provided for a new statewide accountability program and for the Academic Performance Index and supported the high school exit exam.<ref name="End"/> He signed legislation that authorized the largest expansion of the Cal Grant program.<ref name="End"/> Under the Davis administration, California began recognizing students for outstanding academic achievement in math and sciences on the new [[Golden State Exams]]. Davis's Governors Scholarship program provided $1,000 scholarships to those students who scored in the top 1% in two subject areas on the state's annual statewide standardized test.

[[File:Gdavis.jpg|thumb|Official state portrait]]

Davis signed into law legislation that began the Eligibility in the Local Context (ELC) program that guaranteed admission to a [[University of California]] institution to students that finished in the top 4% of their high school class.<ref name="First">[http://www.gray-davis.com/FirstInTheNation.aspx Davis Firsts] {{Webarchive|url=https://web.archive.org/web/20070708235141/http://www.gray-davis.com/FirstInTheNation.aspx |date=2007-07-08 }}. Retrieved August 2007.</ref>{{better source needed|date=August 2021}} Public schools received $8 billion over the minimum required by [[California Proposition 98 (1988)|Proposition 98]] during Davis's first term. Davis increased spending on recruiting more and better-qualified teachers. He campaigned to lower the approval threshold for local school bonds from two-thirds to 55 percent in a statewide proposition that passed. Davis earmarked $3 billion over four years for new textbooks and, between 1999 and 2004, increased state per-pupil spending from $5,756 to $6,922.<ref name="Dark">[http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/10/13/MN124374.DTL Energy crisis leaves Davis record in dark] {{Webarchive|url=https://web.archive.org/web/20090123083459/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F10%2F13%2FMN124374.DTL |date=2009-01-23 }} by Lucas, Greg. [[The San Francisco Chronicle]]. October 13, 2002. News, pg A1. The Chronicle Publishing Company 2002. Retrieved July 23, 2007.</ref>

In 2001, Gov. Gray Davis signed Senate Bill 19, which establishes nutritional standards for food at elementary schools and bans the sale of carbonated beverages in elementary and middle schools.<ref name="Child">[http://www.berkeley.edu/news/media/releases/2003/01/02_obesity.html San Diego conference tackles child obesity epidemic] {{Webarchive|url=https://web.archive.org/web/20070609152815/http://www.berkeley.edu/news/media/releases/2003/01/02_obesity.html |date=2007-06-09 }} by Yang, Sarah. January 2, 2003. Media Relations. University of California Berkeley Press Release. Copyright 2002 UC Regents.</ref>

Another early act of Davis's was the reversal of his predecessor Republican Governor Pete Wilson's alteration of California's eight-hour overtime pay rule for wage earners.

====Signing SB 400 into law====
{{BLP sources section|date=September 2022}}

In 1999, the [[CalPERS]] board proposed a benefits expansion that would allow public employees to retire at age 55 and collect more than half their highest salary for life (pension spiking). CalPERS predicted the benefits would require no increase in the State's contributions by projecting an average annual return of 8.25% over the next decade. When Board member Phil Angelides' aide questioned whether the stock market could grow that long, Board Chairman William Crist, a former union president, replied that they "could make all sorts of different assumptions and make predictions, but that's really more than I think we can expect our staff to do." CalPERS' chief actuary, objected, finding that it would be "fairly catastrophic" if the fund only grew at 4.4%. The benefits expansion bill, SB 400, passed with unanimous backing by California State Assembly Democrats and was signed into law by Governor Gray Davis. CalPERS then produced a video promoting the legislation with Chairman Crist promising greater benefits "without imposing any additional cost on the taxpayers" and the California State Employees Association president praising it as "the biggest thing since sliced bread". The next year the dot-com bubble burst, and CalPERS did not grow, instead losing value in the stock market downturn of 2002. In 2001–2002, CalPERS provided technical assistance for the Sarbanes-Oxley Act because it had sustained financial losses from the Enron and WorldCom bankruptcies. After the Great Recession, in 2009 CalPERS investments lost 24%, dropping $67 billion in value. Chairman Crist retired from the board and it was later revealed he had accepted more than $800,000 from a firm to ensure hundreds of millions of investment from CalPERS. This CalPERS mess was one of the factors that made Gray Davis get recalled. Governor  Jerry Brown worked on trying to fix this retirement system for years, but CalPERS is still underfunded in 2022 and could end up costing state tax payers hundreds of billions in bailouts.

====Domestic partnerships====
Davis recognized the domestic partnerships registry in 1999 and, in 2001, gave same-sex partners a few of the rights enjoyed by opposite-sex spouses such as making health care decisions for an incapacitated partner, acting as a conservator and inheriting property.<ref name="End"/> He also signed a bill to prevent disqualification from a jury based on sexual orientation. Additionally, he signed a bill allowing employees to use family leave to care for a domestic partner, though he did not make good on a campaign promise to convene a task force on civil unions.<ref name="Dark"/>

====Guns and public safety====
He signed laws in 1999 banning assault weapons by characteristic rather than brand name, as well as limiting handgun purchases to one a month, requiring [[trigger lock]]s with all sales of new firearms and reducing the sale of cheap handguns. Davis's ban included a ban on .50 caliber firearms and so-called "Saturday Night Specials."<ref name="End"/><ref name="First"/> In 2001, Davis signed a bill requiring gun buyers to pass a safety test.<ref name="Dark"/>

====Crime====
A supporter of the death penalty and tougher sentencing laws, Davis blocked nearly all parole recommendations by the parole board.<ref name="Dark"/> Davis campaigned as an ardent supporter of capital punishment; which reportedly played a crucial part in his successful gubernatorial campaign. In 1999, he denied his first clemency request from Thai national [[Jaturun Siripongs]], stating, "Model behavior cannot bring back the lives of the two innocent murder victims." Siripongs was executed in February 1999; the first execution to occur during Davis's governorship.<ref>{{cite news|date=February 7, 1999|title=Governor Rejects Clemency For Murderer From Thailand|work=[[Chicago Tribune]]|url=https://www.chicagotribune.com/news/ct-xpm-1999-02-07-9902070162-story.html|access-date=February 11, 2023|archive-url=https://archive.today/20211219205928/https://www.chicagotribune.com/news/ct-xpm-1999-02-07-9902070162-story.html|archive-date=December 19, 2021}}</ref><ref>{{Cite web|last=Fimrite|first=Peter|date=February 9, 1999|title=Double-Slayer Dies at San Quentin / Ex-Buddhist monk executed despite appeal by pope|url=https://www.sfgate.com/news/article/Double-Slayer-Dies-at-San-Quentin-Ex-Buddhist-2948107.php|access-date=February 11, 2023|website=San Francisco Chronicle|language=en-US}}</ref>

====Relations with Mexico====
Early in 1999, Davis sought to improve relations with Mexico. Davis believed that California under [[Pete Wilson]] had left millions of dollars of potential trade revenues "on the table."<ref name="Mexico">{{cite news |author=Robert Salladay, Examiner Capitol Bureau |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/e/a/1999/01/27/NEWS14205.dtl |title=Stats belie Davis claim on trade with Mexico |work=San Francisco Chronicle |date=1999-01-27 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20090122231618/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fe%2Fa%2F1999%2F01%2F27%2FNEWS14205.dtl |archive-date=2009-01-22 |url-status=live }}</ref> Davis said he wanted California to have relations with Mexico that were more like [[Texas]] under then-Governor [[George W. Bush]].<ref name="Mexico"/> Controversy over the California-Mexico border and [[California Proposition 187]] had strained the relationship between the two parties.<ref>{{cite news |first1=Carla |last1=Marinucci |url=http://sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/18/MN224549.DTL |title=Davis to Meet Mexican Leader Twice a Year Fox arrives to inaugurate new cross-border Net link |work=San Francisco Chronicle |date=2001-03-18 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110604041646/http://www.sfgate.com/cgi-bin/article.cgi?file=%2Fchronicle%2Farchive%2F2001%2F03%2F18%2FMN224549.DTL |archive-date=2011-06-04 |url-status=live }}</ref> Davis met with Mexican President [[Ernesto Zedillo]] to improve relations with California's southern neighbor and major trading partner within Davis's first 30 days in office.<ref name="Accomp."/><ref name="End"/> Davis later met with President [[Vicente Fox]] and participated in his inauguration. The Governor met with Mexican presidents eight times. Under the Davis administration, California and [[Baja California]] signed a "Memorandum of Understanding" expanding cooperation in several policy areas.<ref name="Accomp."/> Under Davis, Mexico became California's leading export market for the first time in history and California's trade with Mexico surpassed all of Mexico's trade with Latin America, Europe and Asia combined.<ref name="Accomp.">{{cite web |url=http://www.gray-davis.com/Page.aspx?PageID=16 |title=Davis Digital Library, Accomplishments |publisher=Gray-davis.com |date=1999-05-18 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110711123242/http://www.gray-davis.com/Page.aspx?PageID=16 |archive-date=2011-07-11 |url-status=live }}</ref> Because of the growth in the California economy, Davis opened and expanded trade offices around the world, including in Mexico. But most of these offices were eliminated in the 2003 California budget due to difficult fiscal times.<ref name="Accomp."/>

====Health, environment, business, and transportation====
Davis significantly expanded the number of low-income children with state-subsidized health coverage.<ref name="Accomp."/> He signed laws to allow patients to get a [[second opinion (medicine)|second opinion]] if their [[HMO]] denies treatment and, in limited cases, the right to sue.<ref name="First"/>{{better source needed|date=August 2021}} Davis signed legislation that provided HMO patients a bill of rights, including a help-line to resolve disputes and independent medical review of claims.<ref name="End"/> Under Davis, staff-to-patient ratios in nursing homes improved. However, Davis reneged on a campaign promise to expand low-cost healthcare to parents of needy children due to budget constraints.<ref name="Dark"/>

Davis allowed non-disabled low-income people with HIV to be treated under [[Medi-Cal]]. He signed a law allowing people participating in needle exchange programs to be immune from criminal prosecution. He also increased state spending on AIDS prevention.<ref name="Dark"/>

Under Governor Davis, California's anti-tobacco campaign became one of the largest and most effective in the nation.<ref>{{cite web |url=http://www.californiaconnected.org/tv/archives/94 |title=California Connected Education |publisher=Californiaconnected.org |date=2003-05-29 |access-date=2010-08-14 |url-status=dead |archive-url=https://web.archive.org/web/20091003172351/http://www.californiaconnected.org/tv/archives/94 |archive-date=2009-10-03 }}</ref> [[R. J. Reynolds]] and [[Lorillard]] Tobacco sued over California's antismoking campaign but their lawsuit was dismissed in July 2003. Davis also authorized a new hard-hitting anti-smoking ad that graphically depicts the damage caused by [[secondhand smoke]].<ref name="Accomp."/>

In September 2002, Governor Davis signed bills to ensure age verification was obtained for cigarettes and other tobacco products sold over the Internet or through the mail, ensured that all state taxes are being fully paid on tobacco purchases and increased the penalty for possessing or purchasing untaxed cigarettes.<ref name="la"/> He also signed legislation to expand smoke-free zones around public buildings.<ref name="Accomp."/><ref name="la">{{cite web |url=http://www.lapublichealth.org/tob/legislation.htm |title=Tobacco Control Legislation |publisher=Lapublichealth.org |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110718220941/http://www.lapublichealth.org/tob/legislation.htm |archive-date=2011-07-18 |url-status=live }}</ref>

Davis approved legislation creating a telemarketing do-not-call list in 2003.<ref name="First"/>{{better source needed|date=August 2021}} Under Davis, benefits for injured and unemployed workers increased. The minimum wage increased by $1 to $6.75.<ref name="Accomp."/> Davis backed higher research and development tax credits. He pushed for elimination of the minimum franchise tax paid by new businesses during the first two years of operation.<ref name="Dark"/>

While Davis's record is generally considered pro-environmental due to increases in spending for land acquisition, maintenance of the state's park system, signing legislation that attempts to cut greenhouse gas emissions by having automakers produce more efficient vehicles, cutting fees to state parks and opposing [[offshore drilling]], he was criticized for not backing tougher restrictions on timber companies as some environmentalists desired.<ref name="Dark"/> Under the Davis administration, California purchased {{convert|10000|acre|km2|0}} for urban parks.<ref name="End"/>

Davis signed the first state law in the US in July 2002 to require automakers to limit auto emissions. The law required the California Air Resources Board to obtain the "maximum feasible" cuts in greenhouse gases emitted by all non-commercial vehicles in 2009 and beyond.<ref>[http://www.climate.org/topics/localaction/cal0702.shtml Topics: State and Local Action. California Governor Gray Davis Signs Landmark Law Designed to Cut Car Exhaust Emissions] {{webarchive|url=https://web.archive.org/web/20071015094705/http://www.climate.org/topics/localaction/cal0702.shtml |date=2007-10-15 }} from Climate.org. July 2002. Retrieved September 3, 2007.</ref> Automakers claimed the law would lead smaller and more expensive cars to be sold in California.<ref>[http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/13/MN9QTSTAB.DTL California's emission-control law upheld on 1st test in U.S. court] {{Webarchive|url=https://web.archive.org/web/20090122234501/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2007%2F12%2F13%2FMN9QTSTAB.DTL |date=2009-01-22 }}</ref> In 2003, Davis signed legislation aiming to ban [[Email spam|junk email]].<ref>{{Cite news |last=Hansell |first=Saul |date=2003-09-24 |title=TECHNOLOGY; California Acts to Ban Junk E-Mail |language=en-US |work=The New York Times |url=https://www.nytimes.com/2003/09/24/business/technology-california-acts-to-ban-junk-e-mail.html |access-date=2023-06-12 |issn=0362-4331}}</ref>

On March 25, 1999, Davis issued an [[Executive order (United States)|executive order]] calling for the removal of [[MTBE]] (a toxic gasoline additive) from gasoline sold in the state.<ref>{{cite web|url=http://www.energy.ca.gov/mtbe/documents/1999-06-11_TIMELINE.PDF |title=Timeline for Phase Out of MTBE |publisher=www.energy.ca.gov |access-date=2010-08-14 |url-status=dead |archive-url=https://web.archive.org/web/20080517123624/http://www.energy.ca.gov/mtbe/documents/1999-06-11_TIMELINE.PDF |archive-date=May 17, 2008 }}</ref> In 2001, in order for gas prices to remain reasonable in California while removing MTBE, Davis asked President [[George W. Bush]] to order the EPA to grant California a waiver on the federal minimum oxygen requirement.<ref>{{cite web |url=http://www.energy.ca.gov/releases/2001_releases/2001-05-22_governor_mtbe.html |title=Governor Davis Urges Feds To Grant California'S Request For Oxygenate Waiver |publisher=Energy.ca.gov |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20101008163135/http://www.energy.ca.gov/releases/2001_releases/2001-05-22_governor_mtbe.html |archive-date=2010-10-08 |url-status=dead }}</ref> Without a waiver, California would have to import a much larger amount of [[ethanol]] per year and gas prices were projected to increase drastically. Bush did not grant the waiver and in 2002, Davis issued an executive order reversing his earlier executive order.<ref>{{cite web|url=http://www.acwa.com/issues/waterquality/02-03_exec_order.doc |title=Davis Executive Order |publisher=www.acwa.com |access-date=2010-08-14 |url-status=dead |archive-url=https://web.archive.org/web/20060517025122/http://www.acwa.com//issues/waterquality/02-03_exec_order.doc |archive-date=May 17, 2006 }}</ref>

Davis's actions when it came to regulating business suggested that Davis was a more moderate governor. He worked to kill a comprehensive bill opposed by banks and insurance companies to protect consumers' personal financial information. "What you saw in the campaign was what you got," said UC Berkeley professor Bruce Cain. "He's tried to negotiate a course between the different interest groups and keep Democrats on a more centrist, business-oriented track".<ref name="Dark"/>

Davis approved $5.3 billion over five years for more than 150 transit and highway projects. One of those projects was construction on the new eastern section of the [[San Francisco–Oakland Bay Bridge|Bay Bridge]]. During 1999 and 2000, California spent millions on onetime projects like buying new rail cars and track improvements.<ref name="Dark"/>

====California electricity crisis====
{{Main|California electricity crisis}}
{{Main|Enron scandal}}

Soon after taking office, Davis was able to fast-track the first power plant construction in twelve years in April 1999, although the plant did not come on line before the electricity crisis.

According to the subsequent [[Federal Energy Regulatory Commission]]'s investigation and report, numerous energy trading companies, many based in Texas, such as [[Enron|Enron Corporation]], illegally restricted their supply to the point where the spikes in power usage would cause blackouts. [[Rolling blackout]]s affecting 97,000 customers hit the San Francisco Bay area on June 14, 2000, and [[San Diego Gas & Electric Company]] filed a complaint alleging [[market manipulation]] by some energy producers in August 2000.<ref name="Highest">{{cite news |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2000/12/08/MN148567.DTL |title=Highest Energy Alert: Stage 3 Emergency Rolling blackouts narrowly averted by shutting down huge pumps |work=San Francisco Chronicle |date=December 8, 2000 |access-date=2010-08-14 |first=David |last=Lazarus |archive-url=https://web.archive.org/web/20111227215157/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2000%2F12%2F08%2FMN148567.DTL |archive-date=December 27, 2011 |url-status=live }}</ref> On December 7, 2000, suffering from low supply and idled power plants, the [[California Independent System Operator]] (CAISO), which manages the California power grid, declared the first statewide Stage 3 power alert, meaning power reserves were below 3 percent. Rolling blackouts were avoided when the state halted two large state and federal water pumps to conserve electricity.<ref name="Highest"/>

[[File:Windmill Field outside Palm Springs, California.jpg|thumb|Windmill field outside Palm Springs. Hot temperatures were thought to be pushing California to rolling blackouts, though it was later discovered that market manipulation was the cause.]]
On January 17, 2001, Davis declared a state of emergency in response to the electricity crisis. Speculators, led by [[Enron|Enron Corporation]], were collectively making large profits while the state teetered on the edge for weeks and finally suffered rolling blackouts on January 17 and 18.<ref name="Highest"/> Davis stepped in to buy power at highly unfavorable terms on the open market, since the California power companies were technically bankrupt and had no buying power. California agreed to pay $43 billion for power over the next 20 years.<ref name="Highest"/> Newspaper publishers sued Davis to force him to make public the details of the energy deal.<ref name="Chain">[http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/02/17/MN149246.DTL Governor's Race Gray Davis Energy crisis grew into ball and chain] {{Webarchive|url=https://web.archive.org/web/20090122231425/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F02%2F17%2FMN149246.DTL |date=2009-01-22 }} by Glendhill, Lynda. The San Francisco Chronicle. Sunday, February 17, 2002. Retrieved August 14, 2007.</ref>

During the electricity crisis, the Davis administration implemented a power conservation program that included television ads and financial incentives to reduce energy consumption. These efforts, the fear of rolling blackouts and the increased cost of electricity resulted in a 14.1% reduction in electricity usage from June 2000 to June 2001.<ref name="Highest"/>

Gray Davis critics often charge that he did not respond properly to the crisis, while his defenders attribute the crisis solely to the [[accounting scandals|corporate accounting scandal]]s and say that Davis did all he could. Some critics on the left, such as [[Arianna Huffington]], alleged that Davis was lulled to inaction by [[campaign contribution]]s from energy producers.<ref>{{cite news |last=O'Hehir |first=Andrew |url=http://www.salon.com/2001/01/27/power_4/ |title=Gov. Davis and the failure of power |work=Salon |date=2001-01-27 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20121009094744/http://www.salon.com/2001/01/27/power_4/ |archive-date=2012-10-09 |url-status=live }}</ref> Some of Davis's energy advisers were formerly employed by the same energy speculators who made millions from the crisis. In addition, the Democratic-controlled legislature would sometimes push Davis to act decisively by taking over power plants which were known to have been gamed and place them back under control of the utilities. Some conservatives argued that Davis signed overpriced energy contracts, employed incompetent negotiators and refused to allow electricity prices to rise for residences statewide much as they had in San Diego, which they argue could have given Davis more leverage against the energy traders and encouraged more conservation.<ref>{{cite news|url=http://www.findarticles.com/p/articles/mi_qa3827/is_200308/ai_n9286114 |archive-url=https://web.archive.org/web/20070324221436/http://www.findarticles.com/p/articles/mi_qa3827/is_200308/ai_n9286114 |url-status=dead |archive-date=2007-03-24 |title=Ten good reasons to recall Gray Davis |via=Find Articles |access-date=2010-08-14 | year=2003 }}</ref> The electricity crisis is considered one of the major factors that led to Davis's recall.

[[File:Gray Davis energy.jpg|thumb|left|Davis giving a speech on energy]]

In a speech at [[UCLA]] on August 19, 2003, Davis apologized for being slow to act during the energy crisis, but then forcefully attacked the [[Houston]]-based energy suppliers: "I inherited the energy deregulation scheme which put us all at the mercy of the big energy producers. We got no help from the Federal government. In fact, when I was fighting [[Enron]] and the other energy companies, these same companies were sitting down with Vice President Cheney to draft a national energy strategy."<ref>{{cite news |first1=Carla |last1=Marinucci |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/08/20/MN207450.DTL |title=Contentious Davis blasts GOP 'power grab' |work=San Francisco Chronicle |date=2003-08-20 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20090123033052/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2003%2F08%2F20%2FMN207450.DTL |archive-date=2009-01-23 |url-status=live }}</ref>

When the Enron verdicts were rendered years later, convicting Enron and other companies of market manipulation, Davis responded with the following quote:

{{cquote|[[Ken Lay]] and [[Jeffrey Skilling]], more than anyone, are the reason I'm talking to you now from this law firm.<ref name="bright"/>}} (Skilling's conviction was later overturned by the [[United States Supreme Court]] in its narrowing of the "honest services" statute.)

On November 13, 2003, shortly before leaving office, Davis officially brought the energy crisis to an end by issuing a proclamation ending the state of emergency he declared on January 17, 2001. The state of emergency allowed the state to buy electricity for the financially strapped utility companies. The emergency authority allowed Davis to order the [[California Energy Commission]] to streamline the application process for new power plants. During that time, California issued licenses to 38 new power plants, amounting to 14,365 megawatts of electricity production when completed.<ref name="Accomp."/>

In 2006, the ''[[Los Angeles Times]]'' published an article that credited Davis's signing of the long-term projects for preventing future blackouts and providing California a cheap supply of energy with the increasing costs of energy.<ref>[http://www.gray-davis.com/Page.aspx?PageID=62 Little risk to Schwarzenegger of blackouts, thanks to Gray Davis] {{Webarchive|url=https://web.archive.org/web/20070913112505/http://www.gray-davis.com/Page.aspx?PageID=62 |date=2007-09-13 }} by Kurtzman, Laura. [[Associated Press]]. Posted on Fri, July 21, 2006. Retrieved August 14, 2007.</ref>

In March 2003, the Federal Energy Regulatory Commission's long-awaited report on the so-called "energy crisis" was released. That report substantially vindicated Davis, laying the blame for the energy disruption and raiding of California's treasury on deliberate tactics employed by some 25 energy trading companies, most of which were based in Texas. Of the latter, the most notable was [[Enron]], a number of whose principals were subsequently criminally prosecuted for their roles.

====Budget crisis====
During the economic boom years of the Davis administration, the California budget expanded to cover Davis's new programs. California's low national K-12 education rankings and Davis's campaign pledge to help education, along with the large majority that elected Davis to his first term and his early popularity, suggest that a majority of Californians supported increases in education spending during the early part of his first term when California was in budget surplus. Polls also showed that increased spending in education was supported by the California voters.<ref>{{cite news |author=Greg Lucas, Sacramento Bureau Chief |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/01/30/MN108781.DTL |title=Californians Like Idea Of Cutting Class Size Longer school year comes in 2nd, poll finds |work=San Francisco Chronicle |date=2001-01-30 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20090123083433/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2001%2F01%2F30%2FMN108781.DTL |archive-date=2009-01-23 |url-status=live }}</ref> Under the Davis administration, taxes were cut by over $5.1 billion that included a $3.5 billion cut in sales tax and a reduction in the vehicle licensing fees.<ref name="First"/><ref name="sales">{{cite web |url=http://www.berkeleydailyplanet.com/article.cfm?archiveDate=10-26-00&storyID=1822 |title=$1.1 billion sales tax cut announced by Davis |publisher=Berkeleydailyplanet.com |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20070927222809/http://www.berkeleydailyplanet.com/article.cfm?archiveDate=10-26-00&storyID=1822 |archive-date=2007-09-27 |url-status=live }}</ref> The cut in sales taxes was mandated due to a 1991 law that required sales taxes to be reduced a quarter percent when budget reserves exceed 4 percent of the state general fund for two straight fiscal years which they did in 1999 and 2000.<ref name="sales"/> Davis also vetoed $5.1 billion in appropriations during that span.<ref name="sales"/>

[[File:Davis signs 2000-2001 budget.jpg|thumb|175px|Davis signing the 2000-2001 state budget. The 2002-2003 and 2003-2004 budgets would prove much more difficult to balance with a dramatic drop in state revenue.]]
While California's economy was expanding, California was producing record budget surpluses under Davis even after his tax cuts and new spending. According to the California Department of Finance, California, had a 10% surplus at the end of 1999 and California was projected to have a 4% surplus at the end fiscal year 2000.<ref name="sales"/> These surplus monies were left in the treasury. Davis claimed to be cautious with state finances.

{{cquote|"I'm trying to chart a prudent course and keep us somewhere in the middle. I don't want to jump the gun on spending; I don't want to jump the gun on tax relief," said Davis concerning the budget surpluses on October 26, 2000.<ref name="sales"/>}}

The [[Dot-com bubble|dot-com boom]] that had been fueling California's record tax revenues went bust. California was home to a large number of high tech firms and was largely dependent on state income taxes. State revenues fell while ongoing spending commitments created deficits. Restoring the vehicle licensing fees to pre tax cut levels to close the budget gap and stabilize the state's credit rating became unpopular.<ref name="bright"/><ref>{{cite news |url=http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/12/10/MNGK03K1VB1.DTL |title=State credit rating gets downgraded by Moody's Agency criticizes governor's lowering of vehicle license fee |work=San Francisco Chronicle |date=2003-12-10 |access-date=2010-08-14 |first1=Christian |last1=Berthelsen |first2=Greg |last2=Lucas |archive-url=https://web.archive.org/web/20110604041702/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2003%2F12%2F10%2FMNGK03K1VB1.DTL |archive-date=2011-06-04 |url-status=live }}</ref> The beginning shortfall for the 2002-2003 state budget was $23.6 billion.<ref>{{cite web |url=http://www.caltax.org/San%20Diego9-4-02.pdf |title=No budget relief ahead, state Senate leader says |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110716145941/http://www.caltax.org/San%20Diego9-4-02.pdf |archive-date=2011-07-16 |url-status=live }}</ref> Davis announced that the 2003-2004 budget shortfall would be $34.6 billion while the Legislative Analyst projected a $21.1.<ref>{{cite web |url=http://www.lao.ca.gov/2003/budget_overview/03-04_budget_overview.pdf |title=Overview of the Governor's Budget |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20100721162749/http://www.lao.ca.gov/2003/budget_overview/03-04_budget_overview.pdf |archive-date=2010-07-21 |url-status=live }}</ref>

====Relationship with legislature====
Davis, a moderate, had some disagreements with the more liberal Democratic-controlled Legislature.<ref name="Dark"/> Democrat [[John L. Burton]], the leader of the [[California State Senate]], was Davis's chief antagonist.<ref name="Dark"/>

====Declining popularity====
In May 2001, in the middle of the [[California electricity crisis]], his numbers declined to 42% approval and 49% disapproval.<ref>{{cite news |first1=Carla |last1=Marinucci |url=http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/05/29/MN56632.DTL |title=State gives president tepid ratings Power crisis blamed for 42% approval |work=San Francisco Chronicle |date=2001-05-29 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110604041651/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2001%2F05%2F29%2FMN56632.DTL |archive-date=2011-06-04 |url-status=live }}</ref> By December 2001, Davis's approval ratings spiked up to 51%.<ref>{{cite news |author=Lynda Gledhill, Chronicle Sacramento Bureau |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/12/13/MN236557.DTL&hw=Gray+Davis+May+2002+polls&sn=017&sc=646 |title=Riordan has edge on Davis in polls Governor's mixed reviews seen to benefit challenger |work=San Francisco Chronicle |date=2001-12-13 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20090123083443/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2001%2F12%2F13%2FMN236557.DTL&hw=Gray+Davis+May+2002+polls&sn=017&sc=646 |archive-date=2009-01-23 |url-status=live }}</ref> His numbers declined back to the May 2001 level and remained about the same over the next year.<ref>{{cite news |author=Lynda Gledhill, Chronicle Sacramento Bureau |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/07/12/MN206022.DTL&hw=Gray+Davis+May+2002+polls&sn=025&sc=598 |title=Davis unpopular, but a bit less so Democrats, independents more supportive in past months, poll says |work=San Francisco Chronicle |date=2002-07-12 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20090123083455/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F07%2F12%2FMN206022.DTL&hw=Gray+Davis+May+2002+polls&sn=025&sc=598 |archive-date=2009-01-23 |url-status=live }}</ref> In April 2003, Davis had a 24% approval rating and 65% disapproval rating.<ref>{{cite magazine |url=http://www.time.com/time/magazine/article/0,9171,450976,00.html |title=Govs Under The Gun |magazine=Time |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20090123165515/http://www.time.com/time/magazine/article/0,9171,450976,00.html |archive-date=2009-01-23 |url-status=dead }}</ref><ref>{{cite web |url=https://www.npr.org/templates/story/story.php?storyId=1356303 |title=A Profile of California Gov. Gray Davis |publisher=Npr.org |date=2003-07-24 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20150609134059/http://www.npr.org/templates/story/story.php?storyId=1356303 |archive-date=2015-06-09 |url-status=live }}</ref> The leading causes of Davis's steep decline in popularity (and eventual recall) were the [[California electricity crisis]], which involved a sharp increase in electricity rates and a series of blackouts in 2001,<ref>{{Cite book|title=The Recall: Tribunal of the People|author=Joseph Francis Zimmerman|date=2013|publisher=SUNY Press|url=https://books.google.com/books?id=VKZVAgAAQBAJ|page=67|isbn=9781438449258 }}</ref> as well as voter discontent with an increase in state car registration taxes.<ref>{{Cite web|title=Car tax zapped Gray Davis, but new ones won't touch Brown|url=https://www.ocregister.com/2017/04/18/car-tax-zapped-gray-davis-but-new-ones-wont-touch-brown/|newspaper=Orange County Register|first=Thomas D.|last=Elias|date=April 18, 2017}}</ref>

Davis had tried to maintain a middle-of-the-road approach, but ultimately alienated many of the state's liberals who viewed him as too conservative and many conservatives who viewed him as too liberal.<ref>{{cite news |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/e/a/2000/02/13/METRO9080.dtl&hw=Gray+Davis+May+2002+polls&sn=010&sc=718 |title=Liberal voters souring on Davis Labor, women, death penalty foes wonder: Is this guy really a Democrat? |work=San Francisco Chronicle |date=2000-02-13 |access-date=2010-08-14 |first=Robert |last=Salladay |archive-url=https://web.archive.org/web/20090123083600/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fe%2Fa%2F2000%2F02%2F13%2FMETRO9080.dtl&hw=Gray+Davis+May+2002+polls&sn=010&sc=718 |archive-date=2009-01-23 |url-status=live }}</ref> Many were upset that in trying to balance the budget, Davis cut spending for schools while increasing spending for prisons. Some critics attributed the proposal to the [[California Correctional Peace Officers Association]]s donations to Davis's re-election campaign.<ref name="End2">{{cite news |author=Robert Salladay, Chronicle Sacramento Bureau |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/07/21/MN88039.DTL&hw=Gray+Davis+UCLA+August+2003&sn=001&sc=1000 |title=Did Davis hide extent of fiscal crisis in 2002? |work=San Francisco Chronicle |date=2003-07-21 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20090122234456/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2003%2F07%2F21%2FMN88039.DTL&hw=Gray+Davis+UCLA+August+2003&sn=001&sc=1000 |archive-date=2009-01-22 |url-status=live }}</ref>

===2002 gubernatorial campaign===
{{Main|2002 California gubernatorial election}}

Davis began fundraising for his 2002 reelection campaign early in his governorship. Davis raised $13.2 million in 1999 and $14.2 million in 2000, both unprecedented sums at the time so early in an elected term.<ref name="Gladstone">Gladstone, Mark. "California Governor Raises Record Funding for Campaign." [[San Jose Mercury]]. February 2, 2001. Copyright 2001 News Knight Ridder/Tribune Business News. Accessed from LexisNexus July 22, 2007.</ref> Davis's 1999 and 2000 contributions included contributions from Pacific Gas & Electric and Edison International.<ref name="Gladstone"/> Davis also received large contributions from labor groups, environmental groups and individuals.<ref name="Gladstone"/>

Davis's fundraising efforts attracted much attention. [[University of California Berkeley]]'s Institute of Government Studies claimed that Davis's fundraising skills were "second to none in the political arena" while Senator [[John McCain]] called Davis's 2001 goal of $26 million "disgraceful."<ref name="igs.berkeley.edu">[http://igs.berkeley.edu/library/campaignfinance.html Political Fundraising of Governor Gray Davis] {{webarchive|url=https://web.archive.org/web/20090116061925/http://igs.berkeley.edu/library/campaignfinance.html |date=2009-01-16 }} by Staff of Institute of Government Studies. University of California Berkeley. Retrieved August 13, 2007.</ref> One article in the ''San Francisco Chronicle'' claimed that Davis was raising $34,000 a day.<ref name="igs.berkeley.edu"/> Although Davis's fundraising pace was criticized by his many detractors, [[Arnold Schwarzenegger]] would later collect contributions at a quicker rate during the early years of his governorship.<ref>[http://www.arnoldwatch.org/articles/articles_000130.php3 Schwarzenegger outpacing Davis in fundraising] {{Webarchive|url=https://web.archive.org/web/20070927040601/http://www.arnoldwatch.org/articles/articles_000130.php3 |date=2007-09-27 }} by Hinch, Jim. [[Orange County Register]]. December 24, 2003.</ref> Arnoldwatch.org, a project of the Foundation for Taxpayer and Consumer Rights, which is a nonpartisan organization that is critical of both Democrats and Republicans, called Davis a "pay to play" politician and a "sellout".<ref>[http://www.arnoldwatch.org/articles/gray_davis.html The Gray Davis Files] {{Webarchive|url=https://web.archive.org/web/20070823075308/http://www.arnoldwatch.org/articles/gray_davis.html |date=2007-08-23 }} by Arnoldwatch.org.</ref>

During the 2002 election campaign, Davis took the unusual step of taking out campaign ads during the Republican [[Partisan primary|primaries]] against Los Angeles mayor [[Richard Riordan]]. Davis claimed that Riordan had attacked his record and that his campaign was defending his record.<ref>{{cite news|url=http://archives.cnn.com/2002/ALLPOLITICS/03/06/california.primary/index.html |title='Fight' seen in California's governor's race |publisher=CNN |date=March 6, 2002 |access-date=2010-08-14 |url-status=dead |archive-url=https://web.archive.org/web/20090123204655/http://archives.cnn.com/2002/ALLPOLITICS/03/06/california.primary/index.html |archive-date=January 23, 2009 }}</ref> Polls showed that, as a moderate, Riordan would be a more formidable challenger in the general election than a conservative candidate. Polls even showed that Riordan would defeat Davis.<ref>{{cite news |author=Lynda Gledhill, Chronicle Sacramento Bureau |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/12/13/MN236557.DTL |title=Riordan has edge on Davis in polls Governor's mixed reviews seen to benefit challenger |work=San Francisco Chronicle |date=2001-12-13 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110525145225/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2001%2F12%2F13%2FMN236557.DTL |archive-date=2011-05-25 |url-status=live }}</ref> Davis attacked Riordian with negative ads in the primary. The ads questioned Riordan's pro-choice stance by questioning Riordan's support of pro-life politicians and judges.<ref>{{cite news |first1=Carla |last1=Marinucci |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/01/26/MN96853.DTL |title=Davis ad assails Riordan GOP rival's stand on abortion rights challenged |work=San Francisco Chronicle |date=2002-01-26 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110525145514/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F01%2F26%2FMN96853.DTL |archive-date=2011-05-25 |url-status=live }}</ref><ref>{{cite news |first1=John |last1=Wildermuth |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/01/29/MN174369.DTL |title=Riordan silent on abortion flap Davis ad hits GOP governor hopeful for giving to thousands to anti-choice groups |work=San Francisco Chronicle |date=2002-01-29 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110525145612/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F01%2F29%2FMN174369.DTL |archive-date=2011-05-25 |url-status=live }}</ref> The ads pointed out Riordan's position of wanting a moratorium on the death penalty as being to the left of Gray Davis, who strongly supported it.<ref>{{cite news |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/02/22/MN225515.DTL |title=Top GOP governor candidates trade attacks Surveys show Simon closing in on Riordan's once imposing primary lead |work=San Francisco Chronicle |date=2002-02-22 |access-date=2010-08-14 |first1=Carla |last1=Marinucci |first2=John |last2=Wildermuth |archive-url=https://web.archive.org/web/20110525145655/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F02%2F22%2FMN225515.DTL |archive-date=2011-05-25 |url-status=live }}</ref><ref>{{cite news |first=Debra J. |last=Saunders |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/01/27/ED170108.DTL |title=A man for all reasons |work=San Francisco Chronicle |date=2002-01-27 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110525131834/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F01%2F27%2FED170108.DTL |archive-date=2011-05-25 |url-status=live }}</ref>

Davis's negative ads against Riordan and a variety of other equally important factors explained on the 2002 election page, led to Riordan's defeat in the Republican primary by the more staunchly conservative candidate [[Bill Simon (politician)|Bill Simon]]. In the first 10 weeks of 2002, Davis spent $10 million on ads: $3 million on positive ads boasting of his record, $7 million on negative ads against Riordan.<ref>{{cite web |url=http://www.jewishworldreview.com/michael/barone031102.asp |title=What happens in the eight months until California's general election? |publisher=Jewishworldreview.com |date=2002-03-11 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110606160815/http://www.jewishworldreview.com/michael/barone031102.asp |archive-date=2011-06-06 |url-status=live }}</ref>

Davis was re-elected in the November 2002 general election following a long and bitter campaign against Simon, marked by accusations of ethical lapses on both sides and widespread voter apathy.<ref>{{cite news |first1=Carla |last1=Marinucci |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/09/05/MN55825.DTL |title=Davis, Simon heartily disliked Voter disenchantment has soared to unprecedented level, poll says |work=San Francisco Chronicle |date=2002-09-05 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110525131822/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F09%2F05%2FMN55825.DTL |archive-date=2011-05-25 |url-status=live }}</ref> Simon was also hurt by a financial fraud scandal that tarnished Simon's reputation.<ref>[http://www.economist.com/research/backgrounders/displaybackgrounder.cfm?bg=1922064 Gray Davis] {{Webarchive|url=https://web.archive.org/web/20070730065240/http://www.economist.com/research/backgrounders/displaybackgrounder.cfm?bg=1922064 |date=2007-07-30 }} from Economist.com.</ref> Davis's campaign touted California's improving test scores, environmental protection, health insurance coverage for children and lower prescription drug costs for seniors.<ref>{{Cite web|url=http://daily.stanford.edu/article/2002/11/4/governorsRaceFeaturesDiverseViewsGrayDavis|url-status=dead|archive-url=https://web.archive.org/web/20090123183042/http://daily.stanford.edu/article/2002/11/4/governorsRaceFeaturesDiverseViewsGrayDavis|title=Governor's race features diverse views: Gray Davis|archive-date=January 23, 2009}}</ref> Davis's campaign featured several negative ads that highlighted Simon's financial fraud scandal.<ref name="Heat">[http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/08/16/MN76308.DTL Turns up heat as Simon pares down: New ads roast GOP rival as he trims staff] {{Webarchive|url=https://web.archive.org/web/20110525145726/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F08%2F16%2FMN76308.DTL |date=2011-05-25 }} by [[Carla Marinucci]], Lynda Gledhill, Chronicle Staff Writers. The San Francisco Chronicle. Friday, August 16, 2002.</ref> The 2002 gubernatorial race was the most expensive in California state history with over $100 million spent.<ref>{{cite web|url=http://igs.berkeley.edu/publications/detailbooks/CalVotes-2002.html |title=Cal Voter |publisher=Igs.berkeley.edu |access-date=2010-08-14 |url-status=dead |archive-url=https://web.archive.org/web/20100614205830/http://igs.berkeley.edu/publications/detailbooks/CalVotes-2002.html |archive-date=2010-06-14 }}</ref> Davis's campaign was better financed; Davis had over $26 million more in campaign reserves than Simon in August 2002.<ref name="Heat"/> Davis gained re-election with 47.4% of the vote to Simon's 42.4%. However, the Simon-Davis race led in the lowest turnout percentage in modern gubernatorial history, allowing a lower than normal number of signatures required for a recall.<ref>{{cite web |url=http://www.ppic.org/content/pubs/wp/WP_503MBWP.htm |title=Polling in the Governor's Race in California |publisher=Ppic.org |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20100808085507/http://www.ppic.org/content/pubs/wp/WP_503MBWP.htm |archive-date=2010-08-08 |url-status=live }}</ref> Davis won the election, but the majority of voters disliked Davis and did not approve of his job performance.<ref>{{cite news |author=Lynda Gledhill, Chronicle Sacramento Bureau |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/07/11/MN184694.DTL |title=Davis ekes out 7-point lead over Simon Field Poll shows voters against hopeful rather than for governor |work=San Francisco Chronicle |date=2002-07-11 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110525150201/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F07%2F11%2FMN184694.DTL |archive-date=2011-05-25 |url-status=live }}</ref><ref>{{cite news |first1=Robert |last1=Salladay |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/11/06/MN93404.DTL |title=Big challenges ahead for not-exactly-popular incumbent |work=San Francisco Chronicle |date=2002-11-06 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20110525150238/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2002%2F11%2F06%2FMN93404.DTL |archive-date=2011-05-25 |url-status=live }}</ref>

===Second term===
[[File:Davis signs bill.jpg|thumb|right|Davis signs AB 574 on September 11, 2003, establishing a student loan repayment program for members of the State Military Forces.]]

Davis's second term, which lasted only ten months, was dominated by the [[recall election]]. He was widely criticized for responding to the budget crisis by reversing a decade of fee reductions on motor vehicles, a decision which his opponents repeatedly referenced.<ref>{{cite news |last= Richards|first= Gary |date= May 13, 2018 |title=Higher car fees cost Gov. Gray Davis his job: Roadshow |url=https://www.mercurynews.com/2018/05/13/higher-car-fees-cost-gov-gray-davis-his-job-roadshow/ |work= Mercury News|location=San Jose, CA |access-date=March 3, 2020 }}</ref> Not long after Davis signed a law allowing the Department of Motor Vehicles to grant driver's licenses to undocumented immigrants, he was challenged to a recall election. Davis had also signed legislation requiring employers to pay for medical insurance for workers and legislation granting domestic partners many of the same rights as married people, and vetoed legislation that would have given undocumented immigrants free tuition for community college.<ref name="Floor">State Net California Journal. "From the Floor - Gray Davis' final acts." Copyright 2003 State Net(R). November 1, 2003, Saturday. Vol. 55, Iss. no. 11, Pg. 40. Accessed on LexisNexis August 10, 2007.</ref> Some political observers saw these efforts as an attempt to reinforce support from Hispanics, labor union members and liberal Democrats.<ref name="Floor"/> Ultimately, Davis did not have as much support from Hispanics and union members in the recall election as he did in his 2002 re-election.<ref name="Style"/>

[[File:BushCAGovs.jpg|thumb|200px|left|Governor-elect [[Arnold Schwarzenegger]], President [[George W. Bush]] and Governor Gray Davis speak to firefighters on November 4, 2003.]]

Davis was governor during the southern California fires of 2003, more commonly known as the [[Cedar Fire (2003)|Cedar Fire]]. Davis declared a state of emergency in Los Angeles County, San Bernardino County, San Diego County and Ventura County in October 2003 and deployed the National Guard to help with disaster relief. By mid-November, the greater South Los Angeles area had been declared a disaster area. This enabled federal funding to help repair flooding and weather-related damage, including the destruction of thousands of acres of vegetation.<ref>City News Service. "Gov. Grady Davis Declares State of Emergency in South Los Angeles." Friday, November 14, 2003. Copyright 2003 News Service Inc. Accessed on LexisNexis August 10, 2007.</ref> The Cedar Fire was the last major event during Davis's tenure as governor. Both Davis and governor-elect Schwarzenegger worked to help with disaster relief. Schwarzenegger went to Washington, D.C., and met Vice President [[Dick Cheney]] to lobby the federal government for more disaster relief funds.

Davis spent 1,778 days as governor and signed 5,132 bills out of 6,244, vetoing 1,112 bills.<ref name="End">{{cite news |author1=Salladay, Robert |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/11/12/MNGCC2VVFM1.DTL |title=State of Transition: End of the Davis era, Tempered temperament led state |archive-url=https://web.archive.org/web/20120522102751/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2003%2F11%2F12%2FMNGCC2VVFM1.DTL |archive-date=2012-05-22 |work=The San Francisco Chronicle| date=November 12, 2003 |access-date=August 22, 2007|url-status=live|df=mdy-all}}</ref>

===Recall election===
{{Main|2003 California gubernatorial recall election}}

In July 2003, a sufficient number of citizen signatures were collected for a [[recall election]]. The initial drive for the recall was fueled by funds from the personal fortune of [[United States House of Representatives|U.S. Rep.]] [[Darrell Issa]], a Republican who originally hoped to replace Davis himself. The 2003 California recall special election was the goal of the "Dump Davis" campaign and constituted the first gubernatorial recall in Californian history and only the second in U.S. history. Later, [[2012 Wisconsin gubernatorial recall election|the unsuccessful recall]] of [[Scott Walker (politician)|Scott Walker]] of [[Wisconsin]] in 2012 would be the third and the [[2021 California gubernatorial recall election]] of [[Gavin Newsom]] would be the fourth in September 2021.

Early in the runup to the recall election, Davis called the recall election an "insult" to the eight million voters who had voted in the 2002 gubernatorial election. The Davis campaign tried to run against the recall Yes/No vote instead of against the candidates that were trying to replace him. Davis tried to depict the recall as a $66 million waste of money that could allow a candidate with a very small percentage of the vote to become Governor—potentially someone who was very liberal or conservative as there are no primaries in a recall election. Davis tried to run "outside the recall circus" and to make himself appear gubernatorial and hard at work for California, and who had made improvements to education and healthcare.<ref name="Circus"/><ref>{{cite news |url=http://transcripts.cnn.com/TRANSCRIPTS/0310/05/lkl.00.html |title=Interview With California Governor Gray Davis, Wife Sharon Davis |publisher=CNN |date=2003-10-05 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20140829173444/http://transcripts.cnn.com/TRANSCRIPTS/0310/05/lkl.00.html |archive-date=2014-08-29 |url-status=live }}</ref> Early August polls showed that over 50% supported the recall.<ref name="Circus"/>

In September 2003, Davis conceded that he had lost touch with the voters and added that he was holding numerous townhall meetings in an effort to address the problem.<ref name="Concedes">[http://www.sfgate.com/politics/article/Davis-concedes-he-had-lost-touch-with-voters-2588130.php Davis concedes he had lost touch with voters] {{Webarchive|url=https://web.archive.org/web/20130521171922/http://www.sfgate.com/politics/article/Davis-concedes-he-had-lost-touch-with-voters-2588130.php |date=2013-05-21 }} by Salladay, Robert & Coile, Zachary. The San Francisco Chronicle. Thursday, September 18, 2003. Retrieved July 1, 2012.</ref> Poll numbers in September showed a 3% drop in the number of California voters who were planning to vote yes on the recall.<ref name="Mid">Chorneau, Tom. "Campaign midpoint offers Davis last chance." Associated Press State & Local Wire. Tuesday, September 9, 2003. Copyright 2003 Associated Press. Accessed on LexisNexis on August 11, 2007.</ref> According to some analysts and campaign aides, Davis's town hall meetings and conversations with voters were softening his image.<ref name="Mid"/> Many political insiders remarked that Davis had made several comebacks and that he should not be counted out of the race despite poll numbers that showed over 50% planning to vote yes on the recall.<ref name="survival"/><ref name="Circus"/><ref name="Mid"/>

[[File:Gray Davis Terminated.jpg|right|thumb|Headlines of Gray Davis's defeat in [[UC Berkeley]]'s newspaper, the ''[[Daily Californian]]''. The paper's headlines read "Davis Terminated", a reference to one of then governor-elect [[Arnold Schwarzenegger|Arnold Schwarzenegger's]] movie characters, The Terminator.]]

During the recall, Davis blamed some of the state's problems on his predecessor, Pete Wilson.<ref name="Defends">Chorneau, Tom. "Davis defends job and says he'll stay in touch with the people." Associated Press State & Local Wire. Wednesday, September 3, 2003. Copyright 2003 Associated Press. Accessed on LexisNexis on August 11, 2007.</ref> Davis claimed that he would have rather raised taxes on the upper tax brackets instead of restoring vehicle registration fees and college student tuition.<ref name="Defends"/>

Davis called the recall a right-wing effort to rewrite history after having lost the election during the previous year.<ref name="Defends"/> In a 19-minute campaign address that was broadcast statewide, Davis called the recall effort a "right-wing power grab" by Republicans. He blamed Republicans in the legislature and in Washington for many of the state's problems, while accepting some responsibility for those problems.<ref>{{cite news |first1=Carla |last1=Marinucci |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/08/20/MN207450.DTL |title=Contentious Davis blasts GOP 'power grab' Pivotal Address: Governor appeals to his base |work=San Francisco Chronicle |date=2003-08-20 |access-date=2010-08-14 |archive-url=https://web.archive.org/web/20090123033052/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2003%2F08%2F20%2FMN207450.DTL |archive-date=2009-01-23 |url-status=live }}</ref>

{{cquote|"It's like the Oakland Raiders saying to Tampa Bay, 'We know you beat us, but we want to play the Super Bowl again,{{'"}} said Davis about the recall.<ref name="Defends"/>}}

On October 7, 2003, Davis was recalled. The recall was supported by 55.4% of voters. Republican [[Arnold Schwarzenegger]] was elected to replace Davis as governor. The [[San Francisco Bay Area|Bay Area]] and [[Los Angeles County]] were the only regions in California to vote "no" on the recall. Davis is the second governor in the history of the United States to have been recalled; the first was [[Lynn Frazier]] of [[North Dakota]] in [[1921 North Dakota gubernatorial recall election|1921]].<ref name="Recalled">{{cite news |url=http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/10/08/MN52907.DTL |title=Schwarzenegger leads voter revolt Davis recalled; turnout is huge Victory margin provides mandate |work=San Francisco Chronicle |date=2003-10-08 |access-date=2010-08-14 |first1=Carla |last1=Marinucci |first2=John |last2=Wildermuth |archive-url=https://web.archive.org/web/20110917074852/http://www.sfgate.com/cgi-bin/article.cgi?file=%2Fchronicle%2Farchive%2F2003%2F10%2F08%2FMN52907.DTL |archive-date=2011-09-17 |url-status=live }}</ref>

On the night of the recall, Davis conceded defeat and thanked California for having elected him in five statewide elections. Davis mentioned what he defined as the accomplishments of his administration such as improvements in education, environmental protection, and health insurance for children.<ref>[http://www.cnn.com/2003/ALLPOLITICS/10/08/davis.speech/index.html Davis in defeat: 'We'll have better nights to come'] {{Webarchive|url=https://web.archive.org/web/20071204040748/http://www.cnn.com/2003/ALLPOLITICS/10/08/davis.speech/index.html |date=2007-12-04 }} Concession speech transcript.</ref> Davis said he would help Schwarzenegger in the transition and he later urged his staff to do the same.<ref>[http://www.signonsandiego.com/news/politics/recall/20031010-9999_1n10davis.html Davis extols accomplishments, praises aides] {{Webarchive|url=https://web.archive.org/web/20080725005432/http://www.signonsandiego.com/news/politics/recall/20031010-9999_1n10davis.html |date=2008-07-25 }}.</ref> His last day in office was November 17, 2003.<ref>{{cite news |last1=Rabin |first1=Jeffrey L. |title=Davis' Pension: About $105,000 |url=https://www.latimes.com/archives/la-xpm-2003-nov-17-me-pension17-story.html |access-date=August 27, 2020 |work=Los Angeles Times |date=November 17, 2003}}</ref>