ANCHESTER, N.H. - Jeanne Shaheen came to the microphone, looking stunned.
She read briefly from a prepared statement, and took no questions from the reporters planted in front of her.
It was December 1997, Shaheen hadn't even finished her first year as governor, and a political hot potato the size of a Winnebago had just landed in her lap.
The New Hampshire Supreme Court had ruled - on a lawsuit filed six years and two governors earlier - that the state's system of funding education was unconstitutional.
Shaheen had come into office hoping to deregulate the electric industry in New Hampshire, put statewide public kindergarten in place, and make health care more affordable.
Now, she would also be charged with the most gargantuan task that had faced any Granite State governor in this century: Finding a new way to pay for public education in a state famous for its aversion to taxes.
And that day, when she faced the reporters, unable to shake the shellshocked look on her face, she knew this was going to drown out everything else.
''I knew,'' she said this week in typical understated style, ''that it would be a very difficult issue to deal with.''
She was right. And on the cusp of Election Day three years later, the problem has yet to be permanently solved. And that has infuriated people on both sides of the political aisle.
Despite that, Shaheen appears to be electorally strong: Most polls show her leading her Republican rival, former US senator Gordon Humphrey. And yet, for an incumbent who was reelected two years ago in a landslide and was mentioned as a possible vice presidential candidate just months ago, Shaheen appears more vulnerable this time, some observers say.
But despite the education funding quagmire, Shaheen and her allies point out that she has done much of what she said she would when she won office in 1996 and was reelected in 1998.
The electric industry has been deregulated. Public kindergarten is available in about half the communities that did not previously have it. Some 10,000 children have been enrolled in the state's Children's Health Insurance Program. HMO revisions have been passed. Shaheen has made trade missions to Europe, and the state has lured businesses and tourist dollars. She has worked with other New England governors on lowering prescription costs for seniors, and the Senior Rx program is being tested.
''What I feel good about is that even though we've been dealing with that issue [school funding] for the last 21/2 years, that we have accomplished so much in so many other areas,'' Shaheen said.
But Republicans are not so quick to give her credit.
''She has presided in an amiable and pleasant way during good times,'' said Republican activist Tom Rath. ''There have been accomplishments. While they have been narrow, they are the kind of accomplishments that have made people feel we are doing the right thing.
''What clearly has vexed her,'' Rath said, is the school funding suit. ''And I think she wishes that hadn't occurred on her watch.''
Shaheen is something of a policy wonk, given neither to sparkling oratory nor startling pronouncements. She is called a centrist Democrat. She is also called cautious.
While Shaheen holds tightly to traditional Democratic principles - labor, reproductive rights, education, the environment, health care - she also backs the death penalty. She has won praise from the business community for her economic development and trade initiatives.
Some say her presence in an office that had been occupied by Republicans for two decades - and by men for two centuries - has changed the culture of politics in New Hampshire.
''Being the first lady, and a Democrat at that ... it was quite a shock to the political system,'' said former governor Hugh Gregg, a Republican.
Shaheen's ascendancy dovetailed with an influx of high-tech workers into the state and a political shift that made undeclared voters nearly as numerous as Republicans, with Democrats a close third. Some see that change as more significant than any Shaheen has affected.
''I don't think she has had a fundamental impact on the political culture of New Hampshire,'' said Dick Winters, a professor of government at Dartmouth College.
But, Winters said, ''She has maintained the credibility of the Democratic Party as a party of strong leadership - she has really helped the two-party system.''
Shaheen's allies say she is accessible, and has made government more inclusive. And she has championed issues affecting children and families by doing things such as creating a Kids' Cabinet to coordinate the work of agencies that deal with child and family issues.
Should she win reelection, Shaheen says education funding will be front and center.
Some see Shaheen's refusal to take the pledge against broad-based taxes as an act of political courage and a sign of electoral strength. She took the pledge in her previous two runs.
Humphrey has lambasted her for not taking it. The Republican State Committee has been running ads contending that Shaheen is advocating an income tax, though she is not. The only thing she has advocated for education funding in this election season is video gambling, and the only thing she has ruled out is a higher statewide property tax.
Republicans have excoriated her for appointing a tax commission to study the options for funding schools and report its findings in January, after the election.
''This blue ribbon commission is fabulous,'' Gregg said, with some sarcasm. ''What it did was put the issue off 'til she gets by the election. Very smart, politically smart.''
Senate President Beverly Hollingworth, a Democrat, says the governor shouldn't shoulder all the blame for the lack of a permanent education funding solution.
''I would rather that she did not threaten to veto an income tax ...'' But ''she made a promise to the public and while we may have disagreed on that, she kept her promise.''
But Shaheen's foes are furious with her over the issue. And what some see as her lack of leadership has angered even some Democratic party faithful.
''She's shown that Democrats are no more capable of providing leadership on the critical issues of this state than the Republicans have been,'' said former state senator Wayne King, a Democrat who ran for governor in 1994.
Shaheen disagrees. She says that, despite the fact that a permanent solution has yet to be found, tremendous progress has been made.
''What's important is continuing to make progress,'' she said. ''It's getting kids in public kindergarten, making sure we insure people who need health insurance, making progress on education. And we've done all that.
''To let the perfect be the enemy of the good doesn't accomplish what we need to accomplish in this state,'' Shaheen said.
