DALLAS - U.S. Sen. Kay Bailey Hutchison from Texas made the state's bond debt an issue in the governor's race there yesterday as she officially launched her primary challenge to fellow Republican, Gov. Rick Perry.

"For starters, I will spend less, tax less, and borrow less," Hutchison said. "Just look at Gov. Perry's new tax on business. It's been called a 'job killer.' More than 200,000 Texans lost their jobs this year."

Hutchison also targeted one of Perry's pet projects, the Trans Texas Corridor, in announcing her run at LaMarque High School, where she graduated in 1961.

The network of toll highways and rail systems is "the biggest land grab in the history of Texas," Hutchison said, "and the governor wanted to turn it over to a foreign company to build toll roads."

The Texas Department of Transportation, which acted under the direction of Perry and the state legislature in planning for the Trans Texas Corridor, has acknowledged that the project in its previously envisioned form is dead. TxDOT, which bore the brunt of political attacks on Perry's plan for private development of toll roads, took a lashing from Hutchison, as well.

"Today, TXDOT is the most arrogant, unaccountable state agency in the history of Texas," she said. "I will reform and expand the [Texas Transportation Commission]. It should be more representative of all regions of our state. And it will seek and embrace local input. It is time to return to our tradition of free, quality highways and roads."

The TTC oversees TXDOT.

Perry, who has sought to tie Hutchison to the policies of Washington, particularly the federal stimulus funds, which Hutchison voted against, saw his opponent turn the tables yesterday. Hutchison accused Perry of playing politics by refusing to accept all of the stimulus funds, shifting the burden for some programs to Texas taxpayers.

"And to make a political point, we turned down half a billion [dollars] in federal money, sacrificed it to other states, and now we're borrowing three times as much and sticking Texas business with the tab," Hutchison said. "That's not conservative. That's irresponsible. We can do better."

Hutchison's attack on Perry's use of debt to finance transportation and other projects comes as the state is preparing to issue $1.1 billion of Build America Bonds and $5.5 billion of tax and revenue anticipation notes. Last year, Perry and Lieut. Gov. David Dewhurst chastised TxDOT for not issuing all of its authorized debt. The agency explained that it was reluctant to issue debt for projects that might not be completed.

As a U.S. senator, Hutchison has frequently criticized plans to convert existing highways to tollways.

Perry operatives at the Hutchison rally noted that the announcement drew only 150 people, though Hutchison's campaign aides said they did not intend to fill the gym where the announcement was made.

Hutchison, whose husband Ray Hutchison is a former candidate for governor and now bond counsel to a number of issuers at the law firm of Vinson & Elkins, plans to resign her Senate seat this fall, setting up a special election.

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