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Gov. Branstad expresses confidence in budget talks

DES MOINES, Iowa — Gov. Terry Branstad met with top legislative leaders early Monday and said he's increasingly confident lawmakers will pass a budget he can accept.

"We think it's now getting narrowed down to a situation where we will have a budget that is sustainable and avoids some of the bad budgeting practices of the past," said Branstad, at his weekly news conference. "We are feeling more and more confident that the budget that will pass will meet those guidelines that we have spelled out."

Both chambers of the legislature gaveled into session Monday, and lawmakers were sending key spending measures to House-Senate conference committees where details will be bargained.

The Republican-controlled House and Democratic Senate have passed differing spending plans for preschool programs and basic state payments to local schools, but all sides agreed that the toughest issue to solve is overhauling the state's property tax system.

"We'll keep plugging along, but property taxes I would agree that's a hang-up," said House Speaker Kraig Paulsen, R-Hiawatha.

"I would say that's probably the biggest one we're dealing with," said Senate Majority Leader Michael Gronstal, D-Council Bluffs.

Gronstal met with Branstad early Monday and declined to discuss details of their bargaining, but said he's willing to compromise.

"I would certainly hope that people of good faith would be able to bend and give," said Gronstal. "I'm ready, willing and able to give."

Branstad said he would be willing to sign a temporary spending measure keeping state government running after the end of the budget year on Thursday, but said he's getting indications that lawmakers are nearing compromises that he can accept.

"We're very optimistic now that the conference committees are coming together that we can get these issues resolved and pass a sustainable budget that that spends less than we take in every year," said Branstad. "I believe all of these things can be resolved working together in the next several days."

All sides have said they want to deal with property taxes, but they have sharply differing approaches.

Branstad has focused on commercial property taxes, which as taxed at 100 percent of assessed value. He wants to lower that to 60 percent over five years at a cost of $250 million.

Democrats in the Senate have passed a smaller, $50 million package focusing on smaller businesses. Republicans in the House have agreed to lower commercial property taxes, but also want to cut taxes for homeowners by boosting the state's share of local school budgets.

"I met with Senator Gronstal this morning to talk about that and we're going to continue to have those discussions," said Branstad. "I'm hopeful we can do something because this is an issue that's been around here for 33 years."

"We talked mostly about property taxes," said Gronstal. "I expressed some concern about their proposals."

The looming end of the budget year at midnight on Thursday has boosted pressure on lawmakers to negotiate compromises. Branstad has argued he has the authority to keep the state running after that, but many lawmakers don't want to face that possibility.

On school funding, Republicans are calling for spending $35 million on preschool programs, while Democrats are pushing for a $59 million package.

Both Republicans and Democrats have agreed on no increase in state spending on local schools next year, but Democrats want to boost that spending by 3 percent in the second year. Republicans have argued for a 2 percent increase in the second year.

All sides have agreed that state spending next year will be limited to $5.9 billion.