House, Senate Republicans will work with Dayton -- on their terms

Republican legislative leaders say they'll work with Gov. Mark Dayton on ways to approach budget numbers, but they aren't backing off their budget plan.

Two of Dayton's top commissioners sent a letter to lawmakers Tuesday telling them that their budget proposals are more than $1 billion out of balance.

Republican Senate Majority Leader Amy Koch says Republicans intend to pursue their budget plan, in particular a federal waiver that allows the state to change how it administers the federal Medicaid law.

"There are some numbers issues in there that we will have to resolve before we can finish a budget deal," said Koch. "There's some recognition of that. I think the biggest point of discussion has to be the idea of the Health and Human Services budget and what we're going to do with federal waivers."

Koch emphasized that Republicans don't support a tax increase to erase the state's budget deficit. Dayton is proposing to raise income taxes paid by Minnesota's top earners to erase a nearly $5 billion budget deficit.