Local politics in 2005 will be a highs takes poker game. At risk is not just Republican control of City Hall, but also Republican leadership of the state, which has existed since the early 1990s.

The cards will begin to be dealt this month, as the Legislature convenes and both the State of the State and State of the City speeches set out the executives’ agenda. Last fall’s local elections were distinguished by the beginning of an Empire State voters revolt against business-as-usual in Albany. Later this week, the Assembly will announce what internal rules changes it will adopt. Expect them to do as little as possible – items like an end to proxy voting and publicly recorded committee meetings are reasonable and overdue, while real concessions such as redistricting reforms will be strenuously avoided. Governor Pataki’s State of the State Address will be delivered tomorrow, and his challenge will be to show that he is still fully engaged in his job as chief executive, not only riding but leading the effort to reform Albany. For Mr. Pataki – with apparent presidential aspirations and a still undecided statewide electoral future – it is a question of legacy versus laziness.

The State of the City address will provide Mayor Bloomberg’s best chance to determine the election-year agenda. With a wide array of opponents circling what they regard as a vulnerable administration, the mayor needs to make the case that a return to local Democratic rule will mean a return to corruption and government by competing special interests. In the past several months, the mayor has shown increased comfort in attacking dysfunctional institutions such as the Board of Elections, the Campaign Finance Board, and the MTA. But vehicles for reform such as the announced new Charter Revision Commission and Election Reform Commission have not presented clear agendas to date – a troubling sign.

There is a sanguine sense in the administration that the city is doing so well in terms of the objective numbers – for example, murders be low 600 for the third year in a row – that the mayor deserves to be re-elected. But with last month’s Marist poll showing that a majority of New Yorkers think it is time for a new mayor, without an early and aggressive re-election campaign, the Bloomberg administration may find that “deserve” has little to do with winning reelection.

In the first quarter of the new year, two impositions will shape voters’ perceptions of the state of our city more than the mayor’s speech itself. In February, a court decision is due about the funding for public schools. In March, the fare increase from the MTA is expected to take effect. This second fare increase in four years will be immediately felt by New Yorkers, who are likely to blame the administration despite the fact that City Hall has fought the MTA on this issue. A comprehensive communications offensive will be necessary to stop the Democratic candidates from taking advantage.

With spring, mayoral hopefuls will be increasing their criticism of Mr. Bloomberg and each other. Polls show that the former president of the Bronx, Fernando Ferrer, has a lead, but he could be hurt by his connections to the Democratic machine in the Bronx. The speaker of the City Council, Gifford Miller, has already raised an impressive amount of cash, but the Upper East Sider does not offer a strong contrast to the sitting mayor. Manhattan President C. Virginia Fields’s potential candidacy has so far failed to capture much attention. The dark-horse candidate who may end up dominating more headlines than expected is the aggressive congressman Anthony Weiner whose Queens and Brooklyn base may serve him well in the primaries.

In July, the International Olympic Committee will decide whether New York City will host the 2012 Olympics – a decision that will have enormous impact on the mayoral election. Many insiders sniff that New York’s selection is unlikely, especially given international resentment after President Bush’s re-election, but September 11 sympathy and the preponderance of European candidate cities keep us in the game. If New York City is not chosen, it will throw the West Side Stadium into doubt and with it, the significant political capital that Mayor Bloomberg has spent on this development effort.

The September democratic mayoral primary will be bloody, with a run-off likely. Mr. Bloomberg will be ready to spend an unprecedented amount of personal cash on re-election, but this strategy runs the risk of provoking a backlash. November’s general election will be very close, even with the mayor possibly receiving the endorsements of all New York’s dailies. The demographics do not favor him, even if his track record does.

If Mayor Bloomberg wins re-election, the former liberal Democrat may find himself in the odd position of being the highest-ranking Republican in New York State for much of his second term. Eliot Spitzer has already declared he is running for governor in 2006, and Governor Pataki would be unwise to campaign for a fourth term that would unleash Cuomo comparisons. Even Senator Clinton has so far been unable to inspire serious opposition for her re-election. This exposes the fact that New York Republicans are always one election away from irrelevance.

Take a deep breath. The stakes are high – the shape of our city and state for the rest of the decade. The Democrats are feeling confident and the odds are in their favor. Let the game begin.