SACRAMENTO, Calif. – He’s bigger than Godzilla in Japan. He packed them in at Madison Square Garden in New York. Families flock to his Capitol office like it’s Disneyland just to have their pictures taken next to the gold letters that spell out his name.

Arnold Schwarzenegger is the celebrity governor, who has made Californians – and Wall Street – feel good again.

The Austrian immigrant raves about his adopted state that he called in his inaugural address the “Golden Dream by the Sea.” But as he reaches the first anniversary of that speech Wednesday, Schwarzenegger has yet to fill out a vision for where he is taking California and what he’s going to do with his enormous popularity.

He is “sincere about the effort to restore California to its past greatness,” said Leon Panetta, a former Clinton White House chief of staff who has advised the Republican governor. “But the question that remains is whether he can take the ball over the goal line, and that will say a lot about whether he can be remembered as a great governor.”

One year after Gray Davis left office, there are more jobs in California, tax revenues are coming in better than expected and the state’s credit rating has improved. Drivers from Eureka to San Diego are paying on average $162 less to register their cars.

But not all is well. Parents are paying 14 percent more to send their children to the state’s most prestigious universities, the number of prisoners has swelled and California is carrying more debt than ever before. Most significantly, the state’s chronic budget gap that contributed to Davis’ demise persists.

“They’ve made progress,” said former Assembly Republican leader Bob Naylor, a lobbyist who gives the Schwarzenegger administration high marks. “But the hardest part is yet to come.”

Already, Schwarzenegger is signaling a new direction for his second year, bringing people into his inner circle who more closely reflect his socially moderate, pro-business and environmentally friendly blend. Tom Campbell, a maverick former GOP congressman, will take over the role of budget architect from a more traditional conservative, and Terry Tamminen, the energetic environmental secretary, will oversee the cabinet.

When Schwarzenegger stood on the Capitol steps a year ago, he was untested and people weren’t sure he could govern. Today, he is a dominant national political figure.

“He’s always been a great politician. He’s always been able to assess what people wanted and needed and then to cater to it beautifully if it suits him,” said filmmaker George Butler, who followed Schwarzenegger as a young bodybuilder for his movie “Pumping Iron.” “In this case, it eminently suits him.”

Schwarzenegger clearly relishes his role, puffing cigars in the canvas smoking tent outside his office, sharing espresso with the Democratic Senate leader and starring at numerous rallies in his tailor-made bomber jackets.

The governor’s enthusiasm has given California a psychological boost. For the first time since 2000, more people tell pollsters the state is heading in the right direction than not.

Schwarzenegger knows that much of politics is perception. He boasts that the once polarized Legislature is now working in harmony. He suggests that California’s budget is on the mend and that the troubled workers’ compensation system is fixed.

On all counts, the reality is less sweeping. But Schwarzenegger is an optimist who often overlooks troubling details. Although he was speaking about marketing the state to Japan, his comments last week just as easily could have described how he has sold California to Californians.

“It’s basically,” he said, “a campaign, interview after interview, to talk about how great California is and how happy I am to see this place change in front of my very eyes because people are working together, let them know that the two parties are working together, the people are working, everyone is in sync, and making it sound, basically, even better than it is, because that’s what marketing is all about.”

From Day One, the former action hero has kept up a pace that his aides find exhausting, yet exhilarating. He has built on a series of accomplishments, bookended by the lowering of the car tax and the recent defeat of ballot measures that threatened his pro-business agenda.

But as Schwarzenegger played up the successes, his administration was at times caught flat-footed. It failed on its first attempt at broaching political reform and promoting solar energy. It found itself in triage mode, trying to patch up problems such as Bay Bridge cost overruns. Visions of radically changing the state’s byzantine school-funding formulas have not materialized.

The governor’s first year was largely shaped by reacting to problems he inherited, like heading off a cash-flow crisis and settling a long-running lawsuit over school conditions.

“Judge us another year from now, after a normal year on the job,” said Tamminen, the incoming cabinet secretary. “All modesty aside, I’d give us pretty high marks for this first, unusual year. Nothing is ever perfect.”

Now Schwarzenegger has a chance to leave his imprint by changing the way legislative districts are drawn, streamlining the state bureaucracy, championing an education policy and building on his environmental agenda.

“It’s a broad tapestry that creates the vision that is the Golden Dream,” said Schwarzenegger’s senior adviser, Bonnie Reiss.

Despite his tough-guy image, calling legislators “girly men” and Democrats “losers,” Schwarzenegger has repeatedly displayed pragmatism, even a willingness to bend to Democratic demands. And while he jokes about trying to hustle the Bush administration for money, he has not been the “Collectinator” the state’s congressional delegation had anticipated.

“No responses, no meetings, no action,” said Rep. Zoe Lofgren, D-San Jose, in a letter to Schwarzenegger last month. “There are billions of dollars that we have brought to your attention that you have yet to collect.”

Still, economists give Schwarzenegger credit for brightening the state’s overall economic picture and creating a business climate that is “not as frightening as it was a year ago,” said Joe Hurd, senior economist at the UCLA Anderson Forecast. “Whether it’s all him, or just timing or a mixture, we don’t know for sure.”

Wall Street’s view of California’s finances, which drives the state’s cost of borrowing, improved after Schwarzenegger sold voters on a $15 billion bond. But the credit rating is still the lowest of any state. Steve Zimmerman of the rating agency Standard & Poors, said there “has not been much progress” on bringing spending and revenues into balance. “That’s where the focus needs to be,” he said.

The governor’s success in a Democratic state has been derived in part by the impression that he is an outsider who does not choose sides based on traditional party lines. And it helps that he’s married to Maria Shriver, a member of the Kennedy dynasty.

Critics contend that Schwarzenegger’s nonpartisan sheen will fade if he continues to side consistently with business interests.

“There’s this illusion of celebrity and Terminator status,” said Miguel Contreras, head of the Los Angeles County Federation of Labor. That will be diluted, he said, if the governor continues to veto bills to raise the minimum wage or import prescription drugs from Canada.

“He wants to yell “special interests’ every time he sees issues affecting working families put forward,” Contreras said. “But at the same time he’s lining his coffers with contributions from big corporations.”

For now, at least, Schwarzenegger is more popular than governors Ronald Reagan or Pat Brown were in their prime.

“People seem to think of him as their guy,” said Joe Rodota, Schwarzenegger’s recall campaign policy director. “There’s this trust there.”

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