ANCHESTER, N. H. - When New Hampshire voters returned Democrat Jeanne Shaheen to the State House Tuesday, it was a groundbreaking moment: Shaheen was the first governor in 38 years to win without taking the state's ''no new taxes'' pledge.
But at the same time, New Hampshire was the only New England state to vote for George W. Bush.
And while they were handing Shaheen a 5-point victory over challenger Gordon Humphrey, voters here also gave Republicans a clear majority in both branches of the Legislature.
That leaves the governor with a tough task, working with a tax-averse Legislature to solve the most contentious issue in a generation: court-ordered school funding.
There's a lot riding on her ability to craft a compromise. In the last round of this debate, the state reached such gridlock that Wall Street warned that its bond rating would be downgraded and some school districts issued pink slips to teachers in anticipation of running out of money.
With no statewide taxes, New Hampshire had long relied on local property taxes to pay for public schools. That changed in 1997. After a lawsuit filed by the state's poorer towns, the state Supreme Court issued the landmark ruling holding that the traditional school-funding process was unconstitutional and that the state needed to come up with a plan to fully fund all schools.
''There were towns that had resources and Cadillac schools, and towns left with beaten-up junkers on blocks in their front yards for schools,'' said Andru Volinsky, lead lawyer for the towns filing the suit.
But the court's order could ultimately cost the state more than $1 billion per year, an amount roughly equal to New Hampshire's entire budget for all other government functions.
Past legislatures have repeatedly rejected Shaheen's preferred solution: legal video gambling at the state's racetracks. Most observers expect gambling bills to be on the table again but doubt they will fare much better.
Schools are open now, thanks to a hastily crafted plan passed by the Legislature in November 1999, which instituted a temporary statewide property tax. But with that measure set to expire in two years, the Legislature must find some solution in its next session.
''Unfortunately the Legislature, and not just on this issue, isn't too good anticipating having to come to a compromise in advance,'' said Doug Hall, director of the nonpartisan New Hampshire Center for Public Policy Studies. ''History clearly says that it requires the threat of some impending crisis.''
Shaheen, in spite of her rejection of the tax pledge, has shown an almost Republican unwillingness to part with state money. Since school funding moved to center stage, both she and the Legislature have largely rejected any new spending. When several bills requiring funding did pass, Shaheen vetoed them, citing the need to deal with schools first.
That will continue, said House Speaker Donna Sytek.
''Unless they strike oil in the White Mountains, I think we are going to be continuing a period when we have to tighten our belts,'' Sytek said. ''The governor has been good at working with the centrists of both parties, and I'm guessing that she will be able to work out a solution and get it solved.''
As she did throughout her campaign, Shaheen has said she will await word from her blue-ribbon tax commission before deciding on a course of action.
''She will take the commission's recommendation and work with the Legislature,'' Shaheen spokeswoman Pamela Walsh said in an interview yesterday. ''When she was elected to her first term, there was a Republican House and Senate, so she is used to working hard to build bipartisan support for legislation.''
But with a far more conservative Legislature now in place, voters aren't holding their breath, and school districts aren't making long-term plans.
''I suspect that a solution will be cobbled together,'' said Hall, ''but it may take the threat of closing the schools to do it.''
