SACRAMENTO, Calif. — What once seemed unthinkable has become a reality: California Gov. Arnold Schwarzenegger's approval ratings have plummeted to Gray Davis levels, and the cornerstone of his "Year For Reform" agenda is on shaky ground.

Schwarzenegger's popularity has tumbled by 20 points in 90 days, and potential voters now are voicing doubt about the state spending restrictions the Republican governor wants them to approve in a special election this fall.

Only 40 percent of Californians think Schwarzenegger is doing a good job and half say he's faring poorly, according to the nonpartisan survey by the Public Policy Institute of California released yesterday.

The numbers suggest that the governor's attempt to get back on offense by jettisoning his contentious pension overhaul plan so he could focus on other proposals has failed. Some Republican strategists now are suggesting that Schwarzenegger consider abandoning the special election.

"When the governor's advisers laid out the special election based on reform, they were counting on a very popular governor to carry a load of fairly complicated ballot measures across the finish line," Republican strategist Dan Schnur said. "In this context, it may be hard for him to pull off an initiative load this fall."

But there are few indications that the governor plans to back down. Schwarzenegger's political advisers met with top Republican lawmakers Wednesday to discuss campaign strategy. Margita Thompson, the governor's press secretary, said the governor's approval ratings and support will increase once they begin a more aggressive campaign.

"The governor still believes that we need change and we need it as soon as we can," she said.

Heading into his second year as governor, Schwarzenegger had support from two-thirds of Californians, including a majority of independent voters and more than 40 percent of Democrats.

But his support among Democrats and independents began to erode in January when he unveiled his 2005 agenda that took aim at Democrats and their union allies. Rather than accede to his demands, opponents quickly organized to challenge Schwarzenegger and his proposals.

The aggressive campaign, complete with millions of dollars in TV commercials attacking Schwarzenegger, has taken its toll. The governor's 20-point slide is more precipitous than Davis' tumble in 2001 when the Democratic governor stumbled through the state energy crisis. At that time, the governor's approval ratings fell from 62 percent to 46 percent over four months.

In a bid to get back on track, Schwarzenegger this month abruptly pulled one of the four main pillars of his "Year for Reform" package that would have revamped state retirement plans. Support for the proposal dwindled as a parade of police and fire widows went public with concerns that the changes would deny them benefits.

Schwarzenegger aides at the time trumpeted the move as a strategic retreat that would deprive Democratic opponents of their main bludgeon. Instead, it has allowed Schwarzenegger critics to turn their sights on the new centerpiece of his special-election package: an initiative that could contain excessive state spending and revamp the formula for funding schools.

The poll found 44 percent of likely voters favor the idea while 37 percent said they are opposed.

If the governor can't rally support for that proposal, which Thompson called "the most important leg of the stool," it could further undermine prospects for a special election this fall.

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Attorney General Bill Lockyer yesterday dropped plans to run for governor and said he instead would run for state treasurer, citing a wish to avoid the character attacks, money chase and partisan politics required to take on Schwarzenegger.