SEATTLE — Democratic Gov. Chris Gregoire and Republican challenger Dino Rossi were in a brawling mood in their first debate Saturday night, exchanging rhetorical punches on spending, taxes and transportation.

Gregoire defended her performance from constant jabs by Rossi and responded by criticizing her challenger for having more sound bites than substance on issues.

“We disagree on priorities. We disagree on values,” Gregoire said, making a point that became evident throughout the hourlong debate.

Saturday was the first of six scheduled debates before the Nov. 4 election.

This Thursday, Gregoire and Rossi will square off at the Association of Washington Business convention at the Semiahmoo Resort in Blaine. Debates are set for Yakima, Spokane, Vancouver and Seattle in October.

KOMO news anchor Dan Lewis moderated the debate in which the candidates sparred on nearly every question.

Government spending and a prospective deficit in the next state budget dominated early questioning and sparked spirited disagreement.

An economic forecast released Thursday predicts tax revenues will drop by $529 million below previous estimates. By 2009, the governor and Legislature may be wrestling with as much as a $3.2 billion deficit.

Rossi attacked Gregoire for causing the problem by grossly overspending beyond expected revenues.

“The bottom line is you just need to look in the mirror,” he said.

Rossi contends in his campaigns that he is the better of the two to deal with the future fiscal challenge, citing his central role in writing a spending plan in 2003 to erase a large deficit without a general tax increase.

Gregoire bristled at an allegation that she would raise taxes in a second term.

“Nobody, absolutely nobody is talking about taxes in this state except my opponent,” she said.

She blamed the looming shortfall on the negative effects of the national mortgage and credit crises. She said the policies of President Bush created the climate for the problems and said it is an approach Rossi has supported.

After Gregoire mentioned the president a third time, Rossi looked at the governor and jested, “We had a pool at the office on how many times she’d say ‘President Bush.’ I picked six. You’ve got three more to go.”

Gregoire fought back, noting the deficit she inherited in 2005 emerged from the budget Rossi takes credit for writing.

On transportation, Gregoire said the state is making gains in its fight against traffic jams, pointing to the number of highway projects undertaken and completed with funding from gas tax increases in 2003 and 2005.

Rossi argued he will increase money for transportation improvements by tapping into a portion of sales tax from the sale of new and used cars. Those dollars now go into the state’s general fund.

“We have a transportation mess in this state. It’s sheer incompetence as to how we got here,” he said.

Gregoire said Rossi’s proposal will siphon dollars now going into education.

“He’s going to take it out of the hides of kids to pay for roads. That’s just not our values,” she said.

On public safety, Gregoire said new investments in law enforcement have helped bring down the rate of crime to its lowest level in years and boosted supervision of the most dangerous offenders released from prison.

Rossi said tougher laws are needed to ensure offenders serve their sentences and are strictly supervised upon release.

Saturday’s stinging exchanges revealed the amount of bitterness pent-up since their historically close 2004 election.

Three ballot counts delivered Gregoire into office with a 133-vote victory. A court decision in mid-2005 ended fighting on the outcome and laid the foundation for this year’s rematch.

Spending in this race is exploding all semblances of the record set in the 2004 election.

Collectively, candidates and independent political committees have raised $23 million thus far, according to the state Public Disclosure Commission.

Gregoire leads the way in fundraising with $9.7 million in donations while Rossi has garnered $8.5 million.

Reporter Jerry Cornfield: 360-352-8623 or jcornfield@heraldnet.com.