"We are seriously considering running for governor for the state of Indiana in the year 2012," Pence said at a Lincoln-Reagan Day Dinner in his home district as reported by the Kokomo Perspective.

Pence has been expected to seek higher office. He gave up his position in the House GOP leadership and announced earlier this year he would not run for president in 2012, prompting many observers to conclude he would run for governor next year.

"We got some encouragement to think about running for even higher office, but as often, I prayed about it and concluded that my calling is closer to home," Pence said Tuesday in reference to the presidential rumors.

Indiana Gov. Mitch Daniels (R) is term-limited and is considering a presidential run. If Pence runs to replace Daniels, he'd be considered the favorite in the GOP primary. Democrats haven't seen a favorite candidate emerge yet.