LANSING – A titanic shift in the 2010 gubernatorial election effort sounded on Tuesday with the unexpected announcement of Lt. Governor John Cherry Jr. that he will not run for governor in 2010. Until Tuesday morning, it was largely expected Cherry would be the Democratic nominee for the post, and the decision completely changes the complexion of the race.

In a statement he first made official on his website, peopleforcherry.com, Cherry blamed the difficulty in fundraising as the main reason behind his decision.

Fundraising was problematic, but fixable, one top Democratic strategist said. This person and a top pollster suggested Cherry recognized that he had an enormous political burden to shake in the widespread unpopularity of Gov. Jennifer Granholm. Unwilling to criticize her, Cherry’s support in match-up polls with possible Republicans came close to tracking Granholm’s low job approvals, the pollster said.

But a person close to Granholm, speaking on background, said money was the only reason Cherry withdrew. “It’s all about the money,” this person said. “John Cherry could be elected governor and be a damn fine governor. It was all about the money.”

As the dust settled and the smoke cleared from the announcement, the changing dynamics of the race came into sharper focus with Lansing Mayor Virg Bernero, even before his ceremonial inaugural for his second term, effectively declaring his candidacy for governor. Also suddenly in the potential mix was Sen. Hansen Clarke (D-Detroit), who filed to run, and former Genesee County Treasurer Dan Kildee.

Two top Democratic strategists, speaking on background, said Cherry’s decision may actually make the Democrats’ push to hold onto the executive office easier since it opens the possibility that an outside candidate could be successful. The public’s mood right now is extremely anti-incumbent and anti-establishment, the strategist said, and that mood cuts across both parties.

In fact, one Democratic strategist was extremely disparaging of many of the top Democrats already looking to run for governor, including House Speaker Andy Dillon (D-Redford Twp.) and Bernero, suggesting the party needs to look at someone with no ties to Lansing.

“Three days ago I would have said, ‘Shut up, (Cherry) is our nominee, so let’s fix this,” the strategist said. “Now I can say let’s get rid of these yahoos and find someone who can win.”

Republicans also issued a statement knocking each of the potential Democratic candidates. But there is also no question that Cherry’s departure from the race robs the GOP of an easy target during the campaign. Gone is the chance to run a television commercial of Cherry casting tie-breaking votes to raise taxes, for example.

Republicans still, however, go into the election with an advantage as almost all political pundits had expected the state to go Republican in the election, said Bernie Porn of the Lansing polling firm EPIC-MRA.

Republicans also might have an advantage, depending on who runs for the Democrats, since that person, even if it is Dillon or Bernero, would have to spend a lot of time building name recognition, Porn said. Attorney General Mike Cox, U.S. Rep. Pete Hoekstra (R-Holland) and Oakland County Sheriff Mike Bouchard all have fairly substantial name recognition now, he said.

DEMOCRATS SHOCKED: It is no exaggeration that the development stunned top Democrats who had no idea that he might pull out of the race. The decision came very late to Cherry, with Sen. Deborah Cherry (D-Burton), his sister, saying that only in the last several days did it seem clear he would decide not to run.

Just last week, Cherry’s wife, Pam Faris, wrote supporters asking for donations that would enter donors into a raffle to have dinner with Cherry.

Former Governor James Blanchard said he was very surprised by the decision. He praised Cherry and said he had talked with him a number of times, advising him on the campaign.

Cherry described Cherry as “very disappointed, sad that it didn’t work out, but understanding that everything’s got to be in line for it to continue. … You can’t run a campaign if you don’t have the money to do it.”

Asked if she tried to change Cherry’s mind, Cherry laughed.

“I trust my brother so much. He is a very talented man who is very capable of assessing a situation. Of course, I’m disappointed,” she said. “But ultimately, I support whatever he decides to do.”

As for where Democrats should turn now for their candidate, Cherry said it is too early for her to contemplate that subject.

“I’m very disappointed that it won’t be him,” she said. “Right now I haven’t thought about anything past that.”

In recent months, Cherry seemed to suffer a drip, drip, drip of negative publicity, from bad polling numbers, to a shake-up at the top of his campaign to continued questions on how he could possibly overcome Granholm’s staggering 70 percent disapproval rating.

Top Democrats interviewed before the announcement said they knew Cherry was having some difficulty raising funds, and they expected an announcement about a major shakeup within the campaign structure.

Sen. John Gleason (D-Flushing), a longtime rival of Cherry in Genesee County politics, said Tuesday that he knew Cherry was in trouble when the Cherry camp made a big push for an event in the county and turnout was low.

Within at least the last two days Cherry told Granholm of his decision. On Monday, top staff in the administration were advised.

Granholm had been scheduled to appear on a number of morning radio shows Tuesday to discuss education reforms she signed into law on Monday. But once the story began to leak, she cancelled the interviews. It was important, one aide said, that Cherry say whatever he had to say and not Granholm.

Cherry had not formally announced his candidacy for governor, planning to do that early this year.

Up until Tuesday, most of the Democratic focus on the gubernatorial race was on whether Mr. Dillon would get into the race. Bernero’s sudden appearance did help raise some questions about whether Cherry was the strongest candidate, but few people honestly thought Cherry would not be the Democrats’ gubernatorial candidate come November 2010.

Granholm was strongly backing him, something she repeated at her year-end press conference two weeks ago.

And Cherry seemed to clearly be setting himself up for a run against Dillon. Last fall he issued a sharp rebuke against the speaker for the latter’s budget agreement with Senate Majority Leader Mike Bishop (R-Rochester).

Cherry had also begun reaching out to business officials, calling for creation of a business income tax, and had called for a tax on bottle water to help pay for higher education.

He had also garnered important support, including endorsements from the last four Democratic speakers who all praised his experience.

There was speculation that White House officials worried about Cherry’s electability, although he scoffed at such comments.

And one official, who was present at a meeting with top White House advisers last year, said state Democrats tried to convince the administration to appoint Ms. Granholm to a job in order to make Cherry governor and the incumbent going into 2010. “If the White House was worried about his electability, they could have given her a job and made him governor,” the official said.

CAMPAIGN SPENDING CRITICIZED: Off camera, however, Mr. Cherry’s fundraising efforts appeared to be not as strong as they could. While figures are not yet officially available, several sources said the buzz is Cherry had raised about $1 million and had spent that much and more.

“He was spending like Granholm and raising money like Bernero,” the strategist said.

The statement Cherry issued laid the decision not to run squarely on the fundraising topic.

“A year ago, when this exp