State Rep. Victoria Steele announced Tuesday she will seek the Democratic nomination in the 2nd Congressional District next year and hopes to take on Republican Rep. Martha McSally in the general election.

The two-term Tucson Democrat said she'll remain in the Arizona House until she files official nomination papers with the secretary of state's office early next year.

The 2nd District is one of the most competitive in the nation and saw nearly $8 million in spending by the two major party candidates last year and massive spending by outside groups. Steele said she's confident she can raise the money needed to run a viable campaign but that money isn't the main driver of her campaign.

"I will raise enough money to have a strong, viable campaign because the support is out there," Steele said. "People don't want this to be just about the money."

McSally beat former Democratic Rep. Ron Barber by 167 votes in November. She reported raising more than $1 million in the three months ending June 30.

"It just shows that she is vulnerable, the fact that she only won by 167 votes," Steele said. "She's a freshman and she's vulnerable."

Steele, 58, was elected to the House in 2012 and re-elected last year. She is a former licensed counselor and broadcaster.

She said she'll focus on moderate issues of major importance to the district that takes in much of Pima and all of Cochise counties. They include a stable water supply, a boost to the federal minimum wage and support for the region's two military bases and veterans' issues.

Border security and veterans and military affairs are key issues in the district that both Barber and McSally focused on in their two head-to-head challenges in 2012 and 2014. The district once held by Rep. Gabby Giffords nearly fell to Republicans twice before McSally's win last year.

McSally's campaign spokesman referred to fundraising numbers released Monday, noting that her support is "through the roof." The National Republican Congressional Committee pounced on Steele, calling her an "extreme liberal."

Steele said she's worked across party lines in the Arizona House, where Democrats hold little power. She noted that she sponsored two of the eight Democratic bills passed in the most recent session.

"So I'm proving you can get things done even in a contentious environment and even in a very partisan environment," she said.