Oregon Democrat John Kitzhaber has scored a historic third term as governor, seven years after his previous stint in office.

Kitzhaber fought off a challenge from Republican Chris Dudley, a former Trail Blazers center and political rookie, with the outcome too close to call until Wednesday evening.

Dudley conceded the race Wednesday evening.

The candidates spent a combined $15 million on the race to replace Democratic Gov. Ted Kulongoski, who is leaving office after the two straight terms allowed by Oregon law.

Kitzhaber, who was buoyed by a last-minute visit from President Barack Obama, will face a state budget situation Kulongoski has described as headed for a cliff. Oregon could see a budget gap of $3 billion in its next two-year budget cycle, and Republican gains in the Legislature could take away Democrats' majority.

Kitzhaber emphasized the message that he has the experience to guide Oregon through a difficult looming budgeting process and tough economic circumstances.

Dudley emphasized the need for a new direction, with an emphasis on creating new jobs and curtailing government. Two recent polls each showed the candidates virtually tied once margin of error was factored into the results.