Perry, after addressing lawmakers on opening day of the Texas Legislature, talked about his record as governor and his ideas for the future in a wide-ranging interview with The Associated Press. The state's longest-serving governor, Perry said he wants to run next year for a third full term in office.
Hutchison has formed an exploratory committee to run for governor in 2010.
Perry noted that she hasn't formally jumped into the race and, when asked whether he has doubts that she will, Perry said: "Oh yeah. I mean, there's plenty of time for the senator to think that it's not in her best interest, Texas' best interest or the country's best interest to leave the United States Senate and come run for governor. But that's, again, that's her call.
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"I'm running," Perry added. "I've announced, I'm in, I'm here and I'm enjoying continuing to move Texas forward."
Hutchison's political spokesman, Todd Olsen, said Hutchison is leaning more and more toward running for governor.
"It sounds like he is hearing the same things that we are, that she is very effective in working for Texas and that people are telling him she's doing a great job," Olsen said. He said Hutchison has been traveling the state talking to Texans who are telling her "they would love to see her helping Texas as governor."
Hutchison has transferred $1 million from her federal campaign account to a state account. She also has said she may leave the Senate before her term is up in 2012, possibly later this year.
As the Legislature meets, Perry said he'll keep working to build more highways and create new jobs, parts of his record he said he's particularly proud of.
"I think Texans do want a leader who's got big ideas. This is a big state. We are a cutting-edge state today. There is no doubt that people across America look to Texas as a leader in transportation infrastructure. They look at us as a leader in economic development," Perry said. "I'm proud that we have embraced a number of those."
In the 2010 governor's race, he said he's confident he'll win if his opponent sticks to talking about Perry's record.
Perry said he's not worried that some of his longtime big donors are supporting Hutchison.
"Kay is a very well known and very long tenured -- 15 years in Washington. We have a lot of the same supporters and contributors. I'm probably going to get some of hers, she's probably going to get some of mine," he said.
Perry again railed against federal officials for a slow response to housing and other needs in the wake of Hurricane Ike, which slammed the southeast Texas coast Sept. 13.
Perry said the state is in a "Catch-22" because it wants to move forward to help Galveston and the University of Texas Medical Branch at Galveston, which had to lay off 3,000 employees after the hurricane, but the state can't come up with a definite plan until Washington officials say how much they'll contribute.
Perry said legalizing casino gambling in Galveston to help the island's economic recovery won't come to fruition in the legislative session. He said what Galveston needs is immediate help from the federal government, and that casino gambling, even if it occurred, would be years in happening.
"This idea that, 'Oh gosh, there's been this major disaster so casino gambling is the answer to that' ... that's a bit of a political ploy for those that are supporters of gambling, casino-type gambling," Perry said. Though he didn't say he would veto casino legislation if it reaches his desk -- Perry rarely makes that kind of statement -- he said there's not the will in the Legislature to pass such a bill and that one will not reach his office.
"I think I know this Legislature fairly well," said Perry, a veteran of state government and a former lawmaker himself.
On the subject of the state budget, Perry said Comptroller Susan Combs' report Monday that the state will have $9 billion less in revenue than it had in the last two-year budget cycle means lawmakers have tough challenges ahead. He said he was wise to suggest during that fall that state agencies begin looking at ways to cut discretionary spending such as travel budgets.
Perry said he's not sure whether it'll be possible to maintain the current level of state services in 2010-11 without dipping into the rainy day fund, which now totals some $6 billion.