BEXLEY, Ohio

-- Gov. Bob Taft began his second term early Monday by acknowledging that balancing the next budget will be tougher than any in the past 50 years.

But Taft, a Republican, said he is more prepared than he would have been if similar economic difficulties had existed when he first took office four years ago.

''I am a little more calm and comfortable with what is happening,'' Taft, 61, said after he and Lt. Gov. Jennette Bradley were sworn in at midnight in a brief ceremony at the governor's residence in suburban Columbus.

''I have got my feet on the ground,'' he said. ''I have got a team in place and I feel I am far better prepared to deal with the severity of the challenges.''

Taft was sworn in among friends and family members in front of the fireplace in the living room and signed the document at his dining room table.

The swearing-in, conducted by Chief Justice Thomas Moyer of the Ohio Supreme Court, was to be repeated in a ceremonial event open to the public later Monday morning.

Taft said completing the Third Frontier high-tech project will be one of his top goals. Taft wants to spend $1.6 billion to improve high-tech research in such areas as biomedical science to retain and attract higher-paying jobs.

Bradley, 50, a bank vice president and Columbus city councilwoman, became the nation's first black woman to serve as lieutenant governor. She was also appointed director of the Ohio Department of Commerce.

Bradley said the significance of being elected the first black woman lieutenant governor started to hit her after she was sworn in. ''It's awe inspiring,'' she said. ''I'm very proud that I'm representing the state of Ohio. It's a shining star in our nation.''

Monday's inaugural ceremonies were to last through the day but were scaled back from four years ago.

Only one day of activities was scheduled instead of three and only one inaugural ball instead of three. The cost was to be about $500,000, all in private donations, said Taft spokesman Orest Holubec. The cost four years ago was about $1 million.

When Taft took office in January 1999, Ohio was still recording healthy tax receipts and state government was flush. His top priority was establishing his volunteer reading program, OhioReads.

This year, Ohio is facing its third budget deficit in two years. Taft is preparing to sell two sets of tax increases to lawmakers; an increase on alcohol or tobacco sales to fix the current deficit and a tax increase to help balance the next two-year budget, which begins July 1.

Taft will work with a House and Senate both controlled by Republicans whose majority grew even more following the November elections. But both chambers also have small but strong cores of conservative lawmakers vehemently opposed to raising taxes.