OLYMPIA — As Gov. Chris Gregoire stood outside the governor’s mansion Monday talking about not seeking a third term, she sounded resigned and relieved about a decision many felt had been dictated to her months ago.

She’d won two bruising and historic elections but an unmatched collapse of th

e economy has left her tending a government in full retreat on nearly every initiative she undertook since entering office six years ago.

She said Monday she cannot be distracted by the rigors of re-election in 2012 as she tries to steer the state back on a path to recovery.

“The worst

thing I could think of for the state of Washington is for me to be preoccupied with a campaign right now,” she said.

“I need to set my sights on the next 18 months and guarantee that we’re out of this recession,” she said. “I don’t want to be distracted from that. We’ve got more work to do and we’re going to make sure it gets done.”

Her decision comes less than a week after Republican Attorney General Rob McKenna declared his candidacy.

It clears the stage for the entry of U.S. Rep. Jay Inslee, D-Wash., into the race. Inslee, who ran once before years ago, has been mulling this campaign for months.

“Today is her day. I will make my intentions on the governor’s race known shortly,” Inslee said in a statement early Monday.

Training her sights on the future may help take away the sting of what Gregoire called a “very personal decision” to not seek another term. She made up her mind after discussing it with her family during the weekend.

“I made some very difficult decisions this past session with my colleagues in the Legislature,” Gregoire said, referring to spending cuts made to plug a $5.1 billion deficit in the budget she will sign Wednesday.

“Today I make another call, and another tough decision,” she said. “Today I say I will not run for a third term as governor of this great state.”

Had Gregoire run, she’d have been trying to achieve a feat accomplished by only one governor in state history, Republican Dan Evans, who served three consecutive terms from 1965 to 1977.

Since winning re-election in 2008, Gregoire had done next to nothing in preparation for another race. Most notably, she wasn’t raising money, which observers from both political parties viewed as signaling her intentions.

“In my opinion, Chris Gregoire decided not to run a long time ago,” said Chris Vance, a public affairs consultant who was state Republican Party chairman in 2004.

But it wasn’t out of concern about unfavorable poll numbers or ability to win, he said. She faced that in her first four-year term and it didn’t stop her from garnering a second.

Gregoire, 64, of Auburn, rose from a clerk typist to lead the state Department of Ecology and then serve three terms as attorney general.

Her tenure as the state’s 22nd governor began under a cloud of uncertainty following the closest gubernatorial race in state history.

She defeated Republican Dino Rossi, a former state senator, by just 129 votes after a hand recount of 2.8 million votes.

As she took the oath of office in January 2005, Republicans were in court challenging the results. Their efforts came up empty when a Chelan County Superior Court judge upheld the outcome in June 2005.

During the 2004 election, a sour economy had then Democratic Gov. Gary Locke proposing tax hikes for an anticipated deficit.

Weeks into her first term, the real estate market heated up and sparked an economic boom which provided the state with some of its largest surpluses ever. This enabled Gregoire to steer billions of dollars into public schools and colleges and expand health care and human service programs.

Gregoire didn’t let the small margin of victory deter her from acting as if she won by a landslide. In 2005, she pushed the Legislature to make the politically difficult decision of raising the gas tax by 9.5 cents — and then months later helped fend off an attempt to repeal it.

In 2008, she beat Rossi more easily in a rematch that set a state record, with close to $45 million spent by the candidates’ campaigns and independent groups combined.

For her, the second term has been disheartening. Revenues plummeted in the worst recession in 80 years, forcing her to cut spending everywhere and suggest thinning or axing programs for the poor and uninsured.

Monday, Gregoire veered away from the negatives of the budget-cutting and summed up her administration’s work to date saying: “You name it, we’ve done it.”

For Republicans, Gregoire’s legacy is going to be one of overpromising and overspending and then being forced to retreat.

“She never focused on any one particular thing,” Vance said. “I think her legacy is going to be incomplete, in a word.”

Democrats said the recession undermined Gregoire’s ability to carry out her aggressive agenda. But history should look kindly on her.

“Two terms, and particularly this last one in this environment, is not fun,” said Ron Dotzauer of Snohomish, a longtime Democratic political consultant. “I think when the dust settles she’s going to get high marks as governor in a very difficult time.”

Lawmakers said they don’t expect a lame duck Gregoire to be disengaged from the legislative process next year.

Republicans hope they see more of the Gregoire they saw this past session when she backed their reforms in the workers compensation program, unemployment insurance and the shrinking of state government.

Gregoire’s decision prompted a slew of partisan posturing Monday heading toward the expected electoral slugfest to pick her successor.

“We look forward to the upcoming governor’s race, and will continue to take on Rob McKenna’s record of failing to stand up for consumers and Washington’s middle class,” said Washington State Democratic Party chairman Dwight Pelz.

Republican Governors Association spokesman Mike Schrimpf issued a statement saying Gregoire bowed to political reality, “recognizing that Washington voters are ready for new leadership in the governor’s office after more than 25 years of Democratic control.”

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com