Comments from Gov. Chris Gregoire, speaking to reporters shortly after Dino Rossi announced that he'll again challenge her for governor:

"All we have to do is ask ourselves: Are we better off as a state today than we were three years ago?" she said. "You bet we are."

She said she's proud of her three years in office. A $2.2 billion state-government shortfall has gone to a $1.5 billion surplus on her watch, she said, and the state's made key investments in education and healthcare. She also pointed to a stalemate-breaking deal on water rights and kudos from business publications for Washington's business climate.

"The fact of the matter is the economy is slumping everywhere in America but in Washington State, because we're headed in the right direction," she said.

She's running for re-election, but says she doesn't plan a formal announcement or campaigning until the legislative session concludes next spring.

"The idea that we have spent too much: Well, I'd rather spend on education than do nothing. That's the workforce of tomorrow," she said.

As for taxes, both the estate tax and a recent gas tax increase were approved by Washingtonians in statewide votes, Gregoire said. The money goes into education and transportation safety, she said.

As for Rossi's candidacy, she said, it comes as no surprise.

"I've never doubted he was going to run," Gregoire said.

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