DALLAS -- Texas officials on Friday blocked a proposed $400 million cash-flow borrowing, opting for interfund transfers that state Treasurer Kay Bailey Hutchison says will cost taxpayers $6 million more than using tax-exempt commercial paper.

At a brief meeting of the state's Cash Management Note Committee, the panel deadlocked 2 to 2 over Hutchison's plan to issue up to $400 million in commercial paper next month for cash flow needs in the second half of the year.

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