By Dave Sherwood
AUGUSTA, Maine, April 9 (Reuters) - Maine Republican governor Paul LePage vetoed a bill Wednesday to expand Medicaid in his state, drawing a clear line between him and Democratic challenger U.S. Representative Mike Michaud, in one of the most closely contended gubernatorial races of 2014.
Like many of his fellow freshman Republican governors, LePage was elected in 2010 on a wave of support from the conservative Tea Party movement with a mandate to reshape state government. He has fought constantly with Democrats since they took control of the Maine legislature in 2013, a rift that has led him to issue 128 vetoes to date, more than any other governor in state history.
Expanding Medicaid, the U.S. health program for the poor, is a central tenet of President Barack Obama's signature health care law and a defining issue in the closely-watched three-way campaign between LePage, Michaud and center-left independent Eliot Cutler, both of whom support Medicaid expansion.
"We're hovering at historic levels of divided government right now," said Tim Storey, an analyst with the National Conference of State Legislatures. "In Maine, you've got a bright blue and a bright red candidate, and neither are afraid to speak their mind."
Across the country, a similar story is unfolding, as high-profile Republican governors Rick Scott of Florida, Scott Walker of Wisconsin, Tom Corbett of Pennsylvania and John Kasich of Ohio spar with close-polling Democratic challengers over health care, taxes and government spending.
"At a time when Washington is not making policy, the states are really taking the lead in addressing problems," says Storey. "So people will be watching these races closely."
The most recent poll on the race, done in November by Pan Atlantic SMS Group, showed six-term Congressman Michaud with the support of 37 percent of likely voters, a one point lead over LePage. Independent candidate Cutler, who lost to LePage in 2010 by less than 2 points after a late-season surge, was trailing by a larger margin.
Michaud, a former paper mill worker, touts Democratic party-line principles, promising affordable health care, an emphasis on education, workforce training and alternative energy.
If elected, he would be the country's first governor to declare he is gay before taking office, which some analysts said could give his campaign a boost.
"He's a guy with a moderate record that never really excited progressives, but they're paying more attention now," said Jennifer Duffy, senior editor for the Cook Political Report.
LePage, the product of a broken home and the oldest of 18 siblings, rarely shies from a fight.
He has refused to speak with the state's largest newspaper, angered state workers by removing a mural celebrating them in a state building and said an opposition leader in the state legislature had a "black heart."
LePage supporters say his gruff nature, while a turnoff for some, has translated to accomplishments. Unemployment in the sate has dropped to 6.2 percent, its lowest rate since 2008, and efforts to reduce welfare costs, debt and income taxes have gained traction.
Duffy says personalities may still steal the show.
"If I had to pick the races that would be largely about personality, I would put Maine in the top two or three in the country," she said. (Editing by Scott Malone)