DES MOINES, Iowa (AP) — Gov.-elect Terry Branstad warned Thursday that he would push lawmakers for the deep tax cuts he promised during last year's campaign despite facing a budget shortfall that he said could reach $700 million.

Branstad, who takes office next week, promised to cut in half the corporate income tax rate and move aggressively to ease commercial property taxes. Those plans, according to some estimates, could cost the state more than $300 million.

Branstad told reporters that he met with Republicans who increased their clout in the last election, taking control of the House and narrowing the gap in the Senate.

"We have already talked with the new Speaker of the House and the Republican leadership in the House, and they believe that money should go to reduce taxes," he said.

Branstad's estimate of the budget shortfall is larger than other projections because he factored in the cost of the tax cuts. The Legislative Fiscal Bureau, the nonpartisan financial advisor to the Legislature, estimated the budget gap at roughly $300 million.

"What we're saying is that money can be used to reduce the tax burden," Branstad said. "That's not only where we're coming from, that's where the new Republicans in the legislature are coming from."

Branstad said the new budget he plans to send to lawmakers will include deep spending cuts, though details are still being finalized. He has vowed to send a proposed budget by the end of the month, and will give a speech to a joint session of the Legislature outlining his priorities.

Branstad served four terms as governor after winning election in 1982, and he said that experience has toughened him for making difficult budget decisions.

"In my first term, we literally closed 38 banks and land values dropped 63 percent," he said. "Our challenge is big, we have a significant shortfall — $600 million to $700 million is the best estimate we have been able to get. Obviously it changes from day to day."

Branstad will be sworn into office at the end of next week, and he has scaled back the ceremony marking his inauguration to reflect the state's sour economy. Aides have declined to detail how much the event will cost, but private funding is covering the costs and money raised will be used to fund scholarships for students in need. National Guard troops in the midst of big deployment to Afghanistan also will be honored.

"I can tell you we're not going to give long speeches," he said. "My wife hates long, boring speeches, so it won't be long. We hope to say something meaningful."