Top legislative leaders hail new progress in stalled budget talks

DES MOINES – Top House and Senate leaders expressed optimism Thursday that new progress is being made toward reaching a budget agreement that would stave off the threat of a state government shutdown on July 1.

House Speaker Kraig Paulsen, R-Hiawatha, told reporters that Thursday's negotiating session held among majority House Republicans, majority Senate Democrats and Gov. Terry Branstad's top aides was the most productive meeting in two months and could form the framework for hammering out a compromise that could end the overtime 2011 session by as early as next week. Friday will mark the 152nd calendar day of a session that was expected to end by April 29.

Democrats who control the Iowa Senate made a counter proposal Thursday that Paulsen said was being carefully reviewed by all the key players working to negotiate a two-year budget deal. Both sides declined to provide details, but the House speaker indicated that Democrats were seeking to boost the level of state funding for education within the confines of Republicans' $5.99 billion spending cap for fiscal 2012.

Paulsen said Thursday was “mostly good news,” adding that “if we're all sincere in that effort then I think that next week is a possibility.”

On Wednesday, the GOP-led House voted 54-38 to approve a so-called “omnibus” spending bill that included a commercial property tax reform provision and higher funding levels for community colleges, regents, early-childhood education and nonprofit private college tuition grants along with a 2 percent boost in K-12 “allowable growth” for per-pupil funding in fiscal 2013. Paulsen told reporters Thursday that passage of that measure “kick started the negotiations” that could lead to a long-awaited bipartisan framework for a two-year state spending plan.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, was not available for comment Thursday, but his office a written statement saying: “I am encouraged by negotiations this morning with Republican legislators and the governor's staff. We believe that we can reach an agreement that would receive bipartisan support in the Senate and pass the House because it would avert a government shutdown by making spending cuts while still investing in our future. In the end, we believe a deal will be possible because Iowans are raising their voices after being empowered with vital, accurate information about the effects of woefully inadequate investments in our schools and other key services.”

Sen. Jeff Danielson, D-Waterloo, president pro tempore of the Iowa Senate, said he was “incredibly disappointed” by what he termed “the ominous” bill that passed the House on Wednesday, and he did not believe it was possible for the Legislature to finalize its 2011 work next week. He said he viewed the House attempt to roll all the financial issues into one measure and to add several unresolved policy issues into the mix was a move backwards.

“My preference is a thoughtful approach and I don't think that an omnibus bill that attempts to solve all of those issues in one large document – many of which are now new policy proposals at the end of the session – is what Iowans expect out of us,” he said.

Paulsen said it was yet to be determined whether the Legislature would work off one bill or a number of measures to wrap up the 2011 work once a compromise is reached on the outstanding issues.

“I think once we resolve the substance, the substance will dictate the process,” he said.

The governor's office and leaders of the split-control Legislature have contended the issues that divide them can be resolved before the state begins the new fiscal year next month.

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