Governor-elect Terry Branstad and incoming Department of Management Director Dave Roederer said Thursday that state expenditures are expected to exceed revenues by $605 million in Fiscal Year 2012 - more than twice as large as the gap projected by the nonpartisan Legislative Services Agency.

"We've got a big challenge," Branstad said. "A lot of one-time money has been used for ongoing expenses. We want to stop what we consider to be bad budgeting practices and really get us back into an affordable, sustainable way to deliver the best quality services in the most efficient and economical way that we can."

In a budget presentation Thursday at the Capitol to reporters and editors, Roederer said the projected budget "deficit" would be $1 billion for Fiscal Year 2013, nearly $1.2 billion for Fiscal Year 2014, and $1.3 billion for Fiscal Year 2015.

Iowa Republicans hope that a nationally broadcast GOP presidential debate they've scheduled for August 11, 2011, in Ames will up the stakes for the Iowa Straw Poll two days later.

"We wanted to make sure it's bigger and better and more prominent than it's ever been before," Republican Party of Iowa chair Matt Strawn said Thursday in a conference call with reporters, less than an hour after announcing the two events.

The Iowa Straw Poll has historically been considered the critical first test of grassroots support for Republican presidential candidates in the first-in-the-nation caucus state.

However, the future of the Ames Republican straw poll was cast into doubt in June 2007 after former New York City Mayor Rudy Giuliani and Arizona Senator John McCain decided to skip the key event leading up to the caucus.

That's something the Iowa GOP hopes to avoid this time around.

Governor-elect Terry Branstad has picked Siouxland Chamber of Commerce President Debi Durham to be the new director of the Iowa Department of Economic Development.

As Branstad introduced her, the two of them began outlining how they plan to change the department into a public/private partnership and create the 200,000 new jobs in Iowa that Branstad promised on the campaign trail.

"That takes legislation," Branstad said of the transformation to a public/private partnership. "We're going to work from the present framework that exists, but we are going to envision where we want to go and we're going to lay that out. We did some of that during the campaign, and we're now going to move forward very aggressively on this even during the transition before we take office. But we will then need to work through the legislative process to get the changes made that we want to get made."

Iowa House and Senate Democrats voted this week to stick with their leaders, despite losses in the 2010 election.

Representative Kevin McCarthy (D-Des Moines) was re-elected the leader of House Democrats but will now serve as the minority leader instead of the majority leader. He said the caucus saw its losses in the 2010 election as part of a nationwide setback for Democrats, and did not blame individual decisions made by legislative leaders here.

"There was not a lot we could do in this campaign environment to stop that trend," McCarthy said. "Some serious setbacks were dealt to Democrats nationally, really pretty epic in scope in what occurred around the country. We are very united as a caucus and hopeful and optimistic about the future because when you have setbacks politically like occurred recently in the election, the opportunity for moving the ball down the field for future success is much, much greater."