Branstad confident a government shutdown can be avoided

JOHNSTON – Gov. Terry Branstad dismissed talk Friday of a state government shutdown on July 1, saying he is confident the split-control Legislature will work with him to secure a budget before the next fiscal year starts next month.

However, should July 1 arrive without a fiscal 2012 spending plan in place, the governor said executive-branch agencies would attempt “as seamlessly as possible” to continue services “across the board” that protect the health, safety and well-being of Iowans. He reiterated that he doesn't believe a shutdown will happen.

“There's always the prospect (of a shutdown) until they pass it and I sign it into law. But we've never let that happen before. I think the Legislature understands their obligation, their responsibility to pass a budget. If they do that, I look forward to signing it,” Branstad said during the taping of Iowa Public Television's “Iowa Press” show.

The governor said he was “cautiously optimistic” that differences can be worked out between legislative Republicans and Democrats, who resumed productive talks on Thursday aimed at reaching a compromise package that would include a two-year state budget and a tax reform package that would provide relief for property owners and boost the earned income tax credit for working families.

At the same time, he said he has emergency powers available to him in the event the state begins fiscal 2012 without a new spending plan to fund government operations. But he does not believe it will come to that.

“The governor has emergency powers and I don't intend to use those unless it is absolutely necessary,” Branstad said. “It's all ‘what if the Legislature doesn't do what it's supposed to do.' Well, the Legislature in Iowa has always finished their budgets on time. I have no reason to believe that they won't.”

The governor said his top priorities in wrapping up the overtime 2011 legislative session are to pass a sustainable state budget that doesn't spend more than the state takes in and to put in place a tax reform package that reduces rates for new and remodeled commercial properties and phases down existing commercial rates to 75 percent over five years while capping increases for agricultural and residential property classes at 2 percent annually. He also wants to revamp the state's economic development agency into a public-private partnership to better market the state and bolster job-creation efforts.

“I just want to make sure we do it right, we do it well and what we do is going to be sustainable for the long term. I think if that's the net result of all of this hard work then it's going to be well worth it,” he said.

Branstad he was committed to making sure that a significant property tax revamp gets done this session and he flatly ruled out a scenario whereby he would approve a budget deal before the July 1 deadline but call lawmakers back to complete the tax reform package if an agreement does not come together yet this month.

“I'm committed to seeing that it gets done and I want to make sure that it's significant,” he said.