Gov. Pawlenty and legislative leaders will resume budget negotiations this morning. Yesterday's talks ended at midnight, after DFLers presented another budget offer.
The governor and state lawmakers are working to agree on the best way to erase the state's $935 million projected budget deficit and provide property tax relief to homeowners.
The Democrats' latest plan would cut spending to higher education and corrections, use payment shifts and increase fees.
House Speaker Margaret Anderson Kelliher, D-Minneapolis, said she's hopeful a deal can be reached soon.
"We're interested in getting a negotiated solution and being able to finish the work again before the constitutiona deadline as well as being able to do it in a way that will help Minnesota seniors and students," Kelliher said.
The DFL property tax relief plan would spend $75 million on local government aid, $75 million on direct property tax relief and cap property tax increases at 5.5 percent.
Gov. Pawlenty's spokesman, Brian McClung, said the property tax cap is still too large, and the governor is concerned about the fee increases proposed in the offer. He said the governor's proposed property tax cap of 3.3 percent is more reasonable.
"We've been willing to talk about moving within that, but we're looking at the numbers that are impacted in terms of how much property tax relief there is and when you get up into the neighborhood of 5.5, that's not going to do a heck of a lot," McClung said.
The governor has until Friday night to take action on an education finance bill and a bill that prohibits the state from implementing federal ID cards.
Kelliher said it is possible that the Legislature could try to override vetoes of both of those bills.
Lawmakers have until Monday to finish their work.