It all seemed so simple in 2004, when Gov. Arnold Schwarzenegger gave his first “State of the State” address.

“The state of our state will soon be strong because our people and our purpose are strong,” Schwarzenegger told a joint session of the Legislature. “We have a new spirit, a new confidence. We have a new common cause in restoring California to greatness.”

The governor had plenty of reasons to be happy. Three months after ousting Democratic Gov. Gray Davis in an unprecedented recall election, his popularity was high and 71 percent of Californians were confident he’d do what was right for the state.

Fast forward six years. Now, as then, the governor takes pride in being the ultimate optimist, someone who’s always ready to see a “fantastic” future in the headlights, regardless of how ugly things look in the rearview mirror.

But the governor’s boundless confidence and relentlessly upbeat attitude is going to be challenged Wednesday when he goes back before the Legislature to give his final “State of the State” speech.

Last year was a grim one for California as the state battled to close a $60 billion budget gap in what the state Department of Finance called “the worst budget crisis in the state’s history.”

Programs important to Californians were slashed, state workers were put on furlough, taxes were raised and even then it took a generous application of smoke and mirrors to allow the governor and the legislators to pretend the budget was balanced.

In his speech, Schwarzenegger will have to talk about his plans to close a new budget gap that’s expected to be more than $20 billion when the spending plan for the 2010-11 is released Friday. If he decides just to go forward with cuts he asked for but didn’t make last year, it could mean closing state parks, eliminating welfare programs, cutting money for schools and universities, ending programs for the aged and infirm and siphoning cash from cities and counties to balance the state budget.

Those plans were unpopular with legislators and voters alike last year. An October Field Poll showed that a record low of 27 percent of California voters approve of the job Schwarzenegger has done, with 65 percent unhappy with his efforts. Even worse, 78 percent of Californians are convincedthe state is headed in the wrong direction.

In 2004, Schwarzenegger was thanking the Legislature for the bipartisan support he had received, something that’s been in short supply in Sacramento lately. The governor also warned about the danger of a “staggering” 2004-05 budget deficit of $15 billion, a number that now would be considered good news if it showed up in Friday’s budget figures.

The governor promised to become “California’s Job Czar” and travel the nation and the world to find more jobs for a growing number of workers. He’s done the traveling and tried to sell the state to employers, but the economic downturn has pushed California’s unemployment rate to 12.3 percent, nearly double what it was in 2004.

Six years ago, Schwarzenegger talked about tearing up the state’s credit cards and promising that “never again will government be allowed to spend money it doesn’t have.” College fee increases must be limited to 10 percent a year, he said, not knowing that UC students would face a 32 percent tuition boost this year.

Schwarzenegger has won some of his fights. He’s made the state greener and put California at the forefront of the fight against greenhouse gases. He trimmed worker compensation costs and fought to streamline state government. And the governor could add some more victories to that list before he leaves office next January.

It’s a good bet that Wednesday’s speech will include some of the governor’s trademark optimism, even as he talks about the tough road ahead for California. But as Schwarzenegger prepares his speech to California, he’s probably thinking about how limitless the opportunities seemed when he stood in front of the Legislature six years ago and asking what happened to his plans to remake the state.

“I did not seek this job to cut, but to build,” Schwarzenegger said back then. “I did not seek this job to preside over the decline of a dream, but to renew it.”

John Wildermuth is a longtime writer on California politics.