Gov. Terry Branstad visited Carroll Wednesday afternoon on his 43-city Iowa tour to gain public support for his party&rsquo;s proposed $6 billion budget for the next fiscal year. <span style="font-size: xx-small;"><em>Daily Times Herald Photo by Jared Strong</em></span>
Gov. Terry Branstad visited Carroll Wednesday afternoon on his 43-city Iowa tour to gain public support for his party’s proposed $6 billion budget for the next fiscal year. Daily Times Herald Photo by Jared Strong
Thursday, June 16, 2011

Gov. Terry Branstad is confident that his fellow Republicans can strike a deal with Iowa Senate Democrats to break a budget impasse that has dragged on for weeks and threatens funding for state services starting in July.

But even if a deal falls through, Branstad told a group of about 40 Carroll area residents on Wednesday, it won’t mean the “end of the world.”

“The governor does have extraordinary powers in times of emergency — we will keep prisoners in prison, and we will patrol the highways,” said Branstad, who’s stop at Pizza Ranch was part of a 43-city tour he launched last week to gain public support for his party’s proposed $6 billion budget for the next fiscal year, which starts July 1.

 Republicans, who control the governor’s office and House, have battled with the Democratic-controlled Senate over three key budget issues:

— Total spending: About $200 million separates the two parties’ proposals. Republicans want to spend just under $6 billion. Democrats have proposed a $6.2 million budget, but expressed willingness this week to go lower.

The spending debate in the next two weeks is likely to center on education, said Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee.

“Our focus has been on education,” said Dvorsky, who expects a new Democrat budget to be unveiled Monday and votes in the Senate on Tuesday or Wednesday. “We want to preserve the preschool funding. … We have to make sure the universities have support.”

Republicans have already agreed to a 2-percent increase in state money for public school districts, Sen. Steve Kettering, R-Lake View, said.

— Commercial property taxes: Leaders from both parties have agreed to shift some tax burden away from commercial-property owners, who pay taxes based on the full value of the property.

Residential-property owners pay taxes on less than half of the property value.

Branstad proposed on Wednesday a 25-percent reduction in commercial-property taxes in the next five years, and a further 15-percent reduction in the following three years.

Dvorsky said Democrats favor the tax breaks for small businesses.

— Annual vs. biennial budgets: Brandstad has ardently pushed for a switch to a two-year budget process, which he says will give it more predictability. Democratic leaders have said the move is a power grab to transfer some authority over the budget from lawmakers to the governor.

Branstad vetoed a transportation budget bill in April because it covered only one year.

If Brandstad is successful, Iowa would be the only state to switch from biennial to annual to biennial budgets twice in the past 40 years, according to the National Conference of State Legislatures.

 Iowa went to annual budgets in 1975, to biennial in 1979, and to annual in 1983, the year Brandstad started his first term as governor.

The NCSL concluded in April that there is “little evidence that either annual or biennial state budgets hold clear advantages over the other.”

The agency found no conclusive support for Branstad’s claim that biennial budgets add predictability, nor did the agency find evidence that the move gives more power to governors, as Democrats have claimed.

Dvorsky said Democrats will agree to a partial state budget for fiscal year 2012 that will require lawmakers to take up the budget again next session.

Branstad said his tour across the state has had its intended effect.

“At least they’re talking to us now,” he said of the Senate Democrats.

Also on Wednesday, Branstad called for a review of how the U.S. Army Corps of Engineers manages the Missouri River Basin.

The Corps upped the release of water from Gavins Point Dam near Yankton, S.D., to a record level this week.

“A lot of people are not very happy” with the Corps of Engineers, Branstad said.