Palin made the surprise announcement in a speech outside her Wasilla home before a gathering of reporters, saying she had decided not to seek a second term next year and would resign her office to avoid becoming a "lame duck" governor.

"I'm not putting Alaska through that," said Palin. "I am determined to take the right path for Alaska even though it is unconventional and not so comfortable."

Lt. Gov. Sean Parnell will assume the governorship following the Governor's Picnic in Fairbanks July 26, according to a press release from Palin's office. Lt. Gen. Craig Campbell, the state's Adjutant General and commander of the Alaska National Guard, will take over as lieutenant governor.

In Homer, as residents and visitors milled about town on a sunny Friday morning, the announcement was met with shock and surprise, followed quickly by speculation on Palin's motives.

"She what?" said Jim Clymer when informed of the news. "I'm stunned. I thought she was doing a good job."

"You're kidding," said Alathea Clymer, as she waited with her husband for lunch at Latitude 59. "It just completely stuns me. I would think her success on the national level would depend on her success at the state level."

Sen. Gary Stevens, president of the Alaska Senate, was just as surprised as everyone else. Stevens's district includes Homer.

"I have no knowledge other than what you see on the news. The Legislature has not been contacted at all. I'm anxious to hear what the governor's reasons are. The question is what's really going on here and why would any governor resign before the end of their term," he said.

Captain's Coffee employee Ashley Needham blamed the resignation on a series of ethics complaints that have dogged the governor recently and have cost her about $500,000 in legal fees.

"Maybe she just feels bad about all the interrogation and stuff about her decisions to travel. Regardless of whether these ethics complaints are true or not, maybe she just doesn't want to put her family through that anymore," said Needham.

Some, like Chicago resident Dave Edwards, who was visiting Homer Friday with his wife, Marty, said the sudden resignation, which comes a year and-a-half before her term was set to expire, might hurt Palin's chances at another elected office.

"I think people would say she didn't follow through on her commitment. The people who elected her to serve for four years would accuse her of being a quitter and she would be out of the limelight. I think if she wanted to run for president, this is the most detrimental thing she could do," said Edwards.

Edwards also speculated that Palin might have financial reasons for resigning.

"People who do public speaking get $100,000 or $200,000 a shot. Right now, she's very popular and she could probably go on a public speaking tour and make a lot of money," he said.

Stevens praised the leadership of Parnell and said there would be "no major issue" in passing the torch to him.

Stevens and Rep. Paul Seaton, who represents Homer in the Alaska House, both said there might be a potential problem with Campbell taking over as lieutenant governor, however, as he was not the official, legislature-approved designee for the job.

Alaska Department of Corrections Commissioner Joe Schmidt was the one most recently nominated by Palin for that position and was confirmed by the Legislature, said Stevens and Seaton.

"As I recall the governor appointed Joe Schmidt and I don't think Craig would be in line unless she changes that designation before she resigns," said Stevens.

As for Palin, an open-ended clue to her future aspirations could be found in the closing line of her speech Friday, a quote from General Douglas MacArthur: "We are not retreating. We are advancing in another direction," she said.

Aaron Selbig can be reached at aaron.selbig@homernews.com.