For California political types, the holidays don’t start until Orange County Congressmember Loretta Sanchez drops her annual Christmas card featuring a goofy picture of her and her cat, Gretzky.

Sanchez, who previously has posed with her kitty while lolling on the beach or sitting astride a thundering Harley, this year features a Dancing with the Stars image spoofing ex-Republican leader Tom DeLay’s embarrassing turn on the show. With Sanchez’s signal that the political year officially is at an end, Capitol Letters takes a second look at the three big state stories we forecasted last New Year’s would take center stage in 2009.

Capitol Letters

Gay marriage hits the wall: Ever since the state’s Supreme Court upheld the Proposition 8 ban on same-sex marriage in May, gay and civil rights activists have engaged in an emotional internal debate about the timing for putting the issue before voters again. Last week, the chances for this to happen in 2010 plummeted, as leaders of the 700,000-member Courage Campaign-the top political organization fighting for gay marriage-announced they won’t sponsor an initiative next year: Based on extensive polling the group conducted about the issue, the campaign’s founder, Rick Jacobs, said: “We do not see a path to victory.”

“The biggest hang-up people have is that the right wing has done a very good job of telling people that somehow children will be affected,” if gay marriage becomes legal again, Jacobs told the San Francisco Chronicle. Opponents used that argument successfully in recent battles on the issue in Maine and New York, which became the 31st and 32nd states to reject efforts to make gay marriage legal. The group’s decision followed similar announcements by two other prominent gay rights groups, Lambda Legal and Equality California; leaders of a smaller group called Love, Honor, Cherish have said they will move ahead with plans for a 2010 initiative anyway, but the lack of broad support within the gay community is certain to generate political pressure to abandon the campaign, amid fears another defeat so soon after Prop. 8 would likely doom the effort for years to come.

California on the brink: After budget gridlock forced California to start issuing IOUs last summer, the governor and Legislature cobbled together a “balanced” spending plan with huge cuts in education and a lot of smoke and mirrors. That measure already is falling apart; legislative analysts now report the current deficit is already $14 billion, and forecast a total $83-billion shortfall during the next four years.

With California mired in recession, programs already cut to levels of a decade ago, and minority Republicans blocking approval of any new taxes, there are no good choices left, as doomsday scenarios about the state defaulting on financial obligations fly in Sacramento. One silver lining: The meltdown has spurred two influential business coalitions-known as California Forward and Repair California-to sponsor campaigns to pass packages of political and fiscal reform initiatives on the 2010 ballot.

Who wants to be a millionaire (governor)? Six months before the primary elections for governor, the shape of the partisan races has become clear. Somewhat amazingly, Attorney General and ex-governor Jerry Brown has cleared the field, with no Democrat stepping up to challenge him following the sudden withdrawal of San Francisco Mayor Gavin Newsom. For the GOP, former eBay CEO Meg Whitman has surprisingly soared to a substantial early lead in the polls, after spending an unprecedented $20 million in the early going. Insurance Commissioner Steve Poizner, the early Republican favorite, is lagging, mired in single digits in recent surveys, although he’s yet to throw any of his own personal fortune into the race. Moderate Tom Campbell, a two-time loser in statewide campaigns, is now in second place, but unlikely to have the money needed in what will be by far the most expensive governor’s race in history.

Water wars: A fourth big political issue that emerged in 2009 (which Capitol Letters didn’t see coming) is the rekindling of California’s historic water wars. Governor Arnold Schwarzenegger and the Legislature recently agreed on a complex proposal to increase supplies from the California State Water Project, particularly to the drought-stricken Central Valley, while simultaneously addressing demands for increased environmental safeguards. With many environmentalists unhappy with the package, and an $11-billion bond proposal headed to the voters amid the state’s never-ending financial crisis, it’s a safe prediction this political battle will stay front-and-center in 2010.

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