OLYMPIA — State Sen. Dino Rossi is convinced that voter discontent about the sagging economy will give Republicans their first crack in two decades at running state government.

Rossi filed yesterday as a candidate for governor, ending months of speculation about whether he would enter the race to replace outgoing Gov. Gary Locke.

Though Rossi, a real-estate broker from Sammamish, won't formally kick off his campaign until later this month, he has already begun collecting "Rossi for Governor" checks and for weeks has been traveling the state to line up support.

It has been 23 years since a Republican was elected governor, and the party's track record in other statewide races has been dismal. But Rossi said he aims to capitalize on what he described as deep discontent over the state's economy and much-maligned business climate.

"It's time," Rossi said. "We have to decide if we want more of what we had for the last 20 years, or if we want to move forward."

State Republican and Democratic party leaders had predictably divergent responses to the news that Rossi would run.

"I'm a happy, happy guy," said state Republican Party Chairman Chris Vance, who has been trying for months to land a big-name candidate for governor. "There is tremendous excitement building behind Dino."

State Democratic Party Chairman Paul Berendt quickly dismissed Rossi as "an anti-choice Realtor who has never had any administrative experience in his life. He's too conservative for this state."

And Berendt believes voters will blame President Bush and national Republicans, not the state's Democratic leaders, for Washington's economic troubles.

Rossi, 44, is nearing the end of his second term in the Senate. But he didn't gain prominence until earlier this year, when he became chairman of the powerful Ways and Means Committee.

With the state facing a record $2.65 billion shortfall, Rossi consistently outmaneuvered House Democrats in pushing through a budget fix that relied almost entirely on spending cuts and no major tax increases.

Many business leaders are particularly enamored of Rossi.

"He really blossomed in the last session," said Don Brunell, president of the Association of Washington Business. "He's a key player in the legislative process, and ended up with strong leadership skills that a lot of our folks are looking at."

Rossi, who was able to restore some major health-care cuts proposed last year by Locke, refers to himself as a "fiscal conservative with a social conscience."

But he is sure to draw a lot of criticism from human-service advocates over budget ideas that didn't fly, such as his proposals to remove nearly 40,000 children from Medicaid and to eliminate state-funded prenatal care for illegal immigrants.

Labor unions also will be gunning for Rossi. David Groves, a spokesman for the Washington State Labor Council, said Rossi consistently votes against labor. Rossi also was instrumental this year in denying pay raises for home-health-care workers and for most teachers.

For Rossi, who has never run for office outside his Eastside legislative district, building name recognition is a major challenge.

Three big-name Democrats — Attorney General Christine Gregoire, King County Executive Ron Sims and former state Supreme Court Justice Phil Talmadge — are vying to replace Locke. Talmadge and Gregoire have won statewide races before, while Sims previously ran for the U.S. Senate.

Rossi's decision to enter the race ends a long and sometimes embarrassing candidate search for the Republicans. During the summer, party leaders were rebuffed by possible candidates King County Sheriff Dave Reichert, telecommunications billionaire John Stanton and former Microsoft executive Bob Herbold.

Before Rossi registered, the Republicans actually had four candidates, including Federico Cruz, Tacoma-Pierce County public-health director. But Vance has dismissed all of them as nonviable candidates.

Rossi said he hasn't decided whether he will give up his Senate seat to run for governor. If he doesn't, he will have to largely put his campaign on hold next spring. Legislators and state officials are barred from soliciting or accepting campaign donations from 30 days before the Legislature convenes until 30 days after it adjourns.

Rossi has said he thinks it could take as much as $5 million to run a credible campaign. Vance and Brunell predicted Rossi would have little trouble raising money, especially from business leaders. Stanton has signed on as one of Rossi's chief fund-raisers.

Rossi still has nearly $100,000 in his Senate campaign account and said he will request permission from those donors to use the money for his gubernatorial campaign.

Rossi said a lot of GOP leaders, including President Bush, urged him to get into the race long ago. But he first wanted to travel the state to take a deeper look at whether he could win.

Seattle Times staff reporter Andrew Garber contributed to this report.

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com