The current fiscal year ends in 17 days, and the leaders who have been negotiating next year’s budget have sent mixed signals in recent days about a possible compromise. Last Wednesday, the Iowa House approved House File 697 on a party-line vote of 54 to 38. The House Journal for June 8 (pdf) includes roll call votes on various amendments and final passage. The 600-page bill includes a budget for two fiscal years and Republican property tax reform plan. Its more controversial provisions include not allowing any growth in K-12 education budgets during the 2012 fiscal year and closing 37 Iowa Workforce Development offices around the state. (UPDATE: Republican State Representative Jason Schultz asserted on June 14 that the House-approved omnibus budget bill requires Iowa Workforce Development to keep all its branch offices open for one more year.) Iowa Senate Democrats have portrayed both of those proposals as deal-breakers and support a higher overall spending target than the $5.99 billion House Republicans approved. Critics have also warned that the changes to commercial property taxes won’t target help to “main street” and small businesses and could force local governments to make big cuts in services.

The omnibus bill didn’t appear to be a promising step toward a budget compromise. Senate Democrats had denounced the proposal as a “Frankenstein” monster. Leading House Democrats sharply criticized the bill after it was approved following less than six hours of debate. Yet on June 9, House Speaker Kraig Paulsen implied that passing House File 697 had been an effective bit of brinksmanship:

“Running the omnibus bill yesterday and sending that over to the Senate had the effect that we were hoping for, and that was it kick-started the negotiations,” said Paulsen, R-Hiawatha, on Thursday after a meeting with Senate leaders that he described as “arguably the most productive meeting we’ve had in two months with the Senate.”

Also on June 9, Senate Majority Leader Mike Gronstal released this statement:

“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.”

Governor Terry Branstad kept his cards close to his chest during a June 10 taping of Iowa Public Television’s “Iowa Press” program. Click here for the video and full transcript. He praised House Republicans for passing “a comprehensive budget” that includes “critically important” property tax reforms. Regarding a broader agreement, Branstad said, “I’m cautiously optimistic that it can get worked out but there’s a lot of details that have to be worked out.” He declined to be specific about how the government would function if no new budget is approved by the start of the next fiscal year on July 1. All sides in the negotiations insist they are working to prevent a shutdown of some state government services.

Use this thread for any comments about the budget or predictions on how the impasse will be resolved.

UPDATE: Senate Appropriations Committee Chair Robert Dvorsky said in a June 13 statement,

Senate Democrats are eager to resume negotiations with the Governor’s staff and House Republicans this afternoon.

Last week, we took a significant step in the negotiations by agreeing to the general fund spending limit proposed by the House Republicans.

This week, the negotiations will focus solely on the details of each of the separate spending bills.

Assuming agreements can be reached in a timely manner, the final hurdle toward adjournment will be cleared and there will be no state government shutdown.