Iowa legislative leaders, Branstad hoping for breakthrough in budget talks

DES MOINES - Gov. Terry Branstad said Thursday he is hoping there will be a breakthrough soon in budget talks with leaders of the split-control Legislature on a tentative framework for shutting down the overtime 2015 session.

Most legislators got an early start on their Memorial Day holiday weekend Thursday, with no work scheduled in either chamber until next week, but top House Republicans and Senate Democrats met sporadically at the Statehouse to negotiate, and some progress being reported.

'Little tiny steps,” Senate President Pam Jochum, D-Dubuque, said after emerging from a morning meeting with GOP leaders.

'They've shown an openness to working with us,” said Senate Majority Leader Mike Gronstal, D-Council Bluffs. 'I think there's growing understanding between the two sides about what the art of the possible is for the two majority-party caucuses. I think they understand the things that are really important to us. I think we understand the pieces that are really important to them. That understanding leads to the basis for a compromise that neither one of us will like.”

House Speaker Kraig Paulsen, R-Hiawatha, told reporters he sees a 'real possibility” that lawmakers could forge budget agreements that could lead to adjourning the 2015 session sometime next week.

'I think people are working in good faith,” Paulson said. 'We'll continue to have conversations this week, try to get numbers so the budget chairs can get to work.”

Budget negotiators are working to bridge a gap in spending targets that began about $166 million apart, with House Republicans capping fiscal 2016 state general fund spending at $7.176 billion, while Senate Democrats adopted Branstad's overall $7.341 billion spending plan but departed with him in a number of ways to get there.

Democrats and Republicans were more than $100 million apart on spending for human services and Medicaid programs. Branstad-led Republicans set a 1.25 percent state aid growth rate for K-12 schools in fiscal 2016 and a 2.45 percent boost to schools in fiscal 2017, but House Republicans recently scaled back their increase to 2 percent for fiscal 2017. Democrats wanted 4 percent growth in state aid to K-12 school districts for both fiscal 2016 and 2017, but scaled back next year's request to 2.625 percent during negotiations.

The two sides are considering a hybrid compromise for a 1.25 percent hike in base education budgets and a one-time $55 million addition to resolve the fiscal 2016 impasse. A similar hybrid approach to fund schools may be considered for the following year as well.

'Oftentimes the tough decisions get left to the last. Hopefully, there will be a breakthrough and things will come together,” Branstad said during an interview Thursday.

'We're going to continue to work and continue to share our observations about the different proposals coming out of the different houses of the Legislature,” the governor added. 'We just want to make sure what's passed is something that is workable and sustainable for the long term, not just something that is a political deal that doesn't meet the needs of Iowans. We want to make sure that it's something that's fiscally responsible and sustainable over the long term and meets the needs. As chief executive, ultimately the buck stops with me to deliver the services. I want to make sure we can do that.”

In 2011, the Legislature was similarly divided with Republicans holding sway in the House and Democrats claiming a majority in the Senate. The two sides worked right up until June 30, the last day of the state's fiscal year, before reaching an agreement to head off the potential for a government shutdown.

Asked about a possible government shutdown scenario for the current session, Gronstal told reporters Thursday that was 'highly unlikely.”