In 1994, Waldman resigned his seat on the Coconut Creek City Commission and challenged incumbent State Representative John Rayson in the Democratic primary in the 90th District, which included Deerfield Beach and Pompano in northern Broward County. Waldman attacked Rayson for representing X-rated clubs and for helping them to incorporate while he simultaneously staked out a public position against them, which prompted an investigation by the Florida Ethics Commission. Despite the controversy, Waldman lost to Rayson by a wide margin, winning only 40% of the vote to Rayson's 60%. Following his defeat, Waldman endorsed Rayson and called for party unity, saying, "It was a tough campaign but now is the time for Democrats to unite against the Republicans in November."