Nov. 9 (Bloomberg) -- New York Mayor Michael Bloomberg won election to a second term by what may be the biggest margin of any Republican in the city's history as voters supported his plans for improving schools, maintaining public safety and promoting economic development.

Bloomberg received 58.55 percent compared with 38.67 percent for Democratic challenger Fernando Ferrer with 100 percent of the voting precincts counted in unofficial returns.

``Tonight we celebrate, tomorrow we go back to work,'' Bloomberg said in a victory speech at the Sheraton New York Hotel. ``We go back to fighting for a New York where families can live safely and grow, where the rights of every citizen are protected; a city where children can learn, with good jobs and housing and health care for all. I can't wait.''

In the next four years, Bloomberg may face projected annual budget gaps of as much as $4.5 billion and the aspirations of potential adversaries jockeying to lead the largest U.S. city because term limits prevent the mayor from running again in 2009, political analysts said.

``Very often in second terms, reality intrudes on dreams and campaign promises because there are icebergs out there,'' said Douglas Muzzio, a political science professor at New York's Baruch College. ``The biggest iceberg is the budget gap, combined with an ambitious second-term agenda and his promise not to raise taxes.''

Past Republicans

Among Republicans who have run for mayor since the city's five boroughs were consolidated in 1898, Bloomberg's 19.88- point margin of victory, pending official returns that will include absentee ballots, surpassed Fiorello LaGuardia's 19.74 percentage-point margin in 1937 and Rudolph Giuliani's 17.24- point win in 1997.

Bloomberg's 58.55 percent of the vote was the highest for a mayoral candidate of any party since Democrat Edward Koch, running with Republican endorsement, won 85 percent in 1985.

In a news conference today, Bloomberg said, ``I don't know that it's a mandate. It is, I suppose, more satisfying than a more-than-one-vote margin, but the law said a one-vote margin's the only thing that matters. And what I'm going to do is go out there and work as hard as I can.''

On the day before the election, a Quinnipiac University poll said Bloomberg was leading Ferrer by 38 percentage points. The poll's margin of error was plus or minus 3.7 points, based on a sample of 712 likely voters.

Facing a 5.5-to-1 Democratic edge in voter registration, Bloomberg drew from his personal fortune to outspend Ferrer $64 million to $7.7 million as of Nov. 3, the latest filing date for the city Campaign Finance Board. Ferrer tried to make the discrepancy an issue throughout the campaign.

Ferrer

``I have the dubious distinction of having run against the best-financed candidate in the history of American politics,'' Ferrer said last night, standing in the ballroom in the Waldorf Astoria Hotel, where his mother worked in the kitchen when he was a youth in the Bronx. ``I ran first and foremost to raise a voice for those without one,'' he said.

The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

Though they lost the mayoralty for the fourth straight time, Democrats kept 48 of 51 seats on the City Council. Two Democratic citywide officeholders, Comptroller William Thompson Jr., 52, and Public Advocate Betsy Gotbaum, 67, were re-elected without Republican opposition.

New Speaker

The mayor will have a new partner in budget negotiations with the council in 2006 because its leader during Bloomberg's first term, Speaker Gifford Miller, was forced out by term limits.

The mayor's financial plan projects gaps of $4.5 billion in fiscal 2007, $4.2 billion in 2008 and $3.7 billion in 2009, caused mostly by higher expenses for pensions, fringe benefits, debt service and Medicaid. He predicted ``nondiscretionary'' costs would grow 28 percent in four years, to $24.6 billion of a $55.9 billion budget by 2009.

During the campaign, Bloomberg promised no new taxes, at least through fiscal 2007, saying economic growth, combined with greater efficiencies, would balance the budget.

Early in Bloomberg's mayoralty, with the city in a recession following the Sept. 11 attacks, Moody's Investors Service, Standard and Poor's and Fitch Ratings issued ``negative outlooks'' on the city's credit.

Credit Ratings

The mayor and council used spending cuts and property and sales tax increases to help balance the 2003 and 2004 budgets. By July 2005, the city enjoyed its highest credit rating ever. Moody's raised its rating to A1 from A2 in April 2005, and Standard & Poor's and Fitch boosted the city to A+ from A, both mid-range grades.

``The council's cooperation was instrumental to the mayor's ability to accomplish his agenda,'' said municipal bond analyst Robert Kurtter of Moody's. ``We have no evidence to suggest that relationship will change. And if it does, we'll have to see how the mayor's able to deal with that change.''

Bloomberg's margin of victory may enhance his power and influence, said Muzzio and Ross Sandler, director of the New York Center for Law.

``He's going to claim a huge mandate for whatever he does,'' Muzzio said. Bloomberg is likely to assume more control from the state over the future of lower Manhattan development because Governor George Pataki, who won't seek re-election next year, ``is a much lamer duck than the mayor is,'' Muzzio said.

School Funding

William Cunningham, Bloomberg's campaign communications director, said a ``strong victory'' may be seen by other politicians as ``an affirmation of his way of running the city.''

The challenges facing Bloomberg include the battle for state school funding. Bloomberg may also revive ideas he raised in his first term, such as solid waste trash-to-steam incinerator plants and tolls on East River bridges and tunnels, Muzzio said.

``He's already got a handle on crime and security,'' Muzzio said. ``The schools appear to be improving. Solid waste removal remains a major problem with billions of dollars spent with no long-term fix.''

Though Bloomberg has said he has no desire for higher office, Sandler said he could still draw power from his vote- winning ability.

``He's shown in his business and government careers that he's intellectually and managerially talented,'' Sandler said. ``Now he's demonstrated considerable political talent. That makes him a triple threat.''

To contact the reporter on this story: Henry Goldman at City Hall at hgoldman@bloomberg.net

Last Updated: November 9, 2005 12:35 EST