Gov. Mark Dayton and a group of Minn. DFL and Republican leaders agreed that the state budget and taxes will top the 2013 legislative agenda, the Star Tribune reported. 

With the state facing a predicted $1.1 billion deficit, Dayton told reporters at a Monday morning news conference that the upcoming budget will not be "extravagant." It is speculated that inome taxes will increase for the wealthiest 2 percent of Minnesotans and that there will be budget cuts. 

"Any tiptoe we take, we'll be accused of overreaching," Dayton said. "This is not going to be, as some fear and some hope, a sky's-the-limit sort of approach [to budgeting]"…

Despite the budget shortfalls, Dayton said he wants to spark job creation and boost funding for state colleges and universities. 

Leaders from both sides agreed on Monday that it is likely that lawmakers will at least discuss issues such as same-sex marriage, marijuana laws, and voting rights. 

The 2013 legislative session convenes Jan. 8.