Only last year Governor Spitzer was seen by the Albany establishment as a rabid dog set loose in the prim statehouse chambers. Now, it appears the governor has his tail caught between his legs.

In January 2007, the target of his State of the State address was the people. Mr. Spitzer vented their grievances, their frustrations, and their lack of confidence in state government. In this year’s speech, Mr. Spitzer didn’t preach to New Yorkers but tailored his remarks to a more exclusive audience — the lawmakers sitting below.

His address was one ever-so-dainty stroll on a bed of eggshells. The governor used his platform not to prepare Albany for times of scarcity — for the pruning of government that is demanded by the $4 billion deficit.

Instead, he sidestepped the question of whether the state can continue to afford huge increases to the education budget that he had unwisely pledged, simply saying, “We’re going to fully fund our schools.”

Only once did he utter the word “hospital,” even though Mr. Spitzer has staked his whole health care agenda on shifting Medicaid money away from hospitals and shaking up their reimbursement rates. He dared not dwell on campaign finance reform, even though the governor a year ago argued that public confidence in Albany could not be restored without an overhaul of its campaign finance laws.

The muzzled approach suggests Mr. Spitzer has misunderstood the source of his problems.

As one lawmaker told me, the governor’s mistake last year was not that he picked fights but picked “self-defeating, hypocritical, self-destructive” ones. Mr. Spitzer wasted political capital trying to usurp the Assembly’s role in picking a comptroller, topple Joe Bruno’s Republican Senate majority, impose his illegal-immigrant license plan on a skeptical public. He failed in all three areas, while spending little capital on the big stuff that matters to the people who elected him.

Mr. Spitzer can win over the people or the Albany establishment. He can’t do both.

“You can’t do anything worth doing without [angering] people,” one veteran Albany observer told me. “Nothing gets done without a fight, unless you’re giving money away.” You certainly can’t pass a property tax cap without getting blood on your hands. Every major union, along with a good portion of the Legislature, will make it their top priority to resist placing a cap on local school taxes.

After Massachusetts, amid a broader national tax revolt in the early 1980s, voted in favor of Proposition 21/2, which placed a 2.5% cap on property tax levies, the unions in the state exploded in frenzy. They organized a 20,000-person protest on Boston Common, where they yelled “Save our State!” and warned that the cap would drive a stake through the state’s schools.

In Wednesday’s speech, Mr. Spitzer offered a well-reasoned explanation for the need of cap. New York, he said, has been throwing away billions of dollars in property tax rebates and school-district subsidies without making a dent, because school districts keep raising taxes faster than Albany can spend the problem away.

A cap, as the governor said, would shift the burden of dealing with the high labor and pension costs and inefficiencies of the state school system onto Albany, which has been content with complaining about high taxes without doing much about it.

Then, Mr. Spitzer announced that he was delegating the problem to the Nassau County Executive Thomas Suozzi, whom he put in charge of a commission that will propose a cap plan.

Mr. Spitzer is clearly hoping that putting a commission in charge will take him out of the fray and allow others to make the calls. Yet, an effective property tax cap — one with a low percentage ceiling and few exceptions — will never pass in Albany as long as Mr. Spitzer hides on the sidelines.

My sense is the governor is suffering from a case post-traumatic stress disorder from a first year in office that ended with the crackup over drivers’ licenses. He seems to have lost his appetite for confrontation because he has lost confidence in his ability to communicate with voters, change minds, and win debates. The big question ahead is whether Mr. Spitzer has the stomach to be a leader.

jacob@nysun.com