Kentucky Governor’s Race May Bode Well for Democrats : Elections: Southern votes are closely watched for hints of party leanings. GOP hoped to continue 1994 tilt, but early returns indicate first loss.

Democrats rebuffed a strong Republican challenge Tuesday and retained the governor’s office in Kentucky, one of a handful of Southern races being watched closely for clues of larger political trends.

Republicans had hoped for a quick and decisive win in Kentucky, where polls closed first, to set the tone for the region. But with 96% of the vote counted, Democratic Lt. Gov. Paul Patton had a 51%-49% advantage over Republican lawyer Larry Forgy. He had held that advantage throughout the night.

Elsewhere in Tuesday’s elections, the GOP sought to hold on to the governorship in Mississippi and, in Virginia, to capture control of both houses of a Southern state’s legislature for the first time in more than 100 years.

Republican victories in all of these contests would have propelled the GOP tide that swept the South in 1994 and buoyed the party’s prospects as it looks toward the 1996 elections.

Conversely, a respectable showing by Democrats would not only provide a boost for a party that has suffered a string of high-profile defeats since winning the White House in 1992, but would also suggest that it will be more competitive in the South next year than had been thought.

Early returns showed Republican Kirk Fordice leading in Mississippi while the legislative picture in Virginia remained unclear.

In Virginia, the GOP began the day within a few seats of winning the state Senate and House of Delegates, which would make it the first all-GOP Southern Legislature since Reconstruction, which ended in 1876.

Both gubernatorial races offered milestones of their own. A Forgy victory over Patton would have meant the first Republican governor in Kentucky since 1971. And in Mississippi, incumbent Republican Fordice was trying to become the state’s first chief executive to win consecutive terms in this century.

Also Tuesday:

* Voters in 17 mostly small-to-medium cities with local elections could cast ballots in a non-binding presidential primary called CityVote, which listed 21 declared or prospective candidates. The contest’s organizer, former Irvine Mayor Larry Agran, hoped it would force White House contenders to focus more on urban problems. Instead, virtually all the declared candidates ignored CityVote’s efforts to call attention to itself.

* In Washington state, an initiative to allow unlimited casino gambling on the lands of Native American tribes also offered voters an unusual enticement: a 10% share of the proceeds.

Although the South has generally voted Republican in presidential races since 1968, the political picture has been more mixed at the state and local levels. But last year, Republicans made impressive gains at every political level and are poised to inflict further damage to Southern Democrats this year.

“The Democrats are close to being marginalized as a political force in the South,” said Stuart Rothenberg, a political consultant in Washington. As a result, Tuesday’s elections in the region “are big races to both parties.”.

Last year, the GOP took lower houses in North and South Carolina and state senates in Florida and Tennessee for the first time since Reconstruction. But winning both houses in Virginia, the heart of the Confederacy, would be a particular coup. Republicans needed to gain just three seats in the 40-member Senate and four in the 100-member House to become the majority in each chamber.

On top of Virginia’s significance in national politics, the legislative races were expected to have important implications for Republican Gov. George F. Allen, a young conservative with 1996 vice presidential hopes.

“Allen has thrown himself into this race, and its outcome could mean a lot for him,” said Bill Wood, head of the nonpartisan Virginia Institute of Political Leadership.

Meanwhile, a race for a Northern Virginia House seat attracted widespread attention because of the candidates’ familial backgrounds: Republican Sandy Liddy Bourne, daughter of G. Gordon Liddy, the Watergate burglar who is now a conservative talk show host, sought to defeat Democratic incumbent Linda (Toddy) Puller, widow of a severely disabled Vietnam War veteran who wrote a Pulitzer Prize-winning autobiography in 1992 and committed suicide last year.

In Kentucky, the hard-fought Forgy-Patton race was haunted by the specters of unpopular issues from both parties.

Patton was hurt early by President Clinton’s decision to support the regulation of tobacco as a drug. Tobacco is a mainstay of the state’s economy. Patton has been busily disowning Clinton ever since.

Forgy, meanwhile, first embraced the agenda of congressional Republicans. He said that voters who wanted the “Republican revolution” to continue in Kentucky should vote for him. But as GOP legislators began tackling such controversial issues as curtailing the growth of Medicare, Forgy distanced himself from his party’s national agenda.

In Mississippi, Fordice was facing moderate Democrat Dick Molpus, the current secretary of state, in what became an unpredictable and nasty race. After amassing a big early lead, Fordice gave an unflattering imitation of Molpus’ wife, Sally, at a press conference, immediately drawing the ire of many voters. Local polls showed Fordice’s lead fell from about 20% to as low as 5% by Election Day.

At their final debate last week, Molpus threatened to take Fordice “to the woodshed” for insulting his wife. Fordice responded by telling Molpus that he would “whip your ass” and was led away from his challenger after the debate to avoid further confrontation.

In his campaign, Molpus called for racial reconciliation.