The Prime Minister has been calling premiers to try and settle a long-running health and education funding dispute before the federal election.

NSW is leading the negotiations with the Commonwealth, seeking an additional $7 billion in funding over four years to strike an interim deal, and is optimistic that one is close.

But federal Treasurer Scott Morrison has repeatedly said he is not interested in raising more tax to pay for state services.

He told AM no deal had been done and it was premature to think the Commonwealth was about to hand over $7 billion.

"It's a process that's working through the [Council of Australian Governments] and the Prime Minister and I continue to engage with the states about a whole range of issues," Mr Morrison said.

A spokesman for the Prime Minister confirmed the conversations with premiers but said the Commonwealth still wanted the states to demonstrate ways they could improve their own tax bases before committing to more funding.

But Victorian Premier Daniel Andrews said today that he had not been approached by Mr Turnbull.

"It seems to me he might want to give his Treasurer a call, actually, because he doesn't seem to know anything about this," he said.

"My position on this has been very, very clear – when you cut hospital funding, you hurt patients, and when you cut school funding you hurt students."

With a poll looming, the states have been primed for a campaign against the Turnbull Government to apply maximum pressure to win back more than $80 billion funding cut in the 2014 budget.

Mr Turnbull is not offering to restore all the money cut but to strike a deal to buy breathing space until after the election.

One state source described the offer as "hush money" aimed at "kicking the can down the road".

Another state source said the issue could be substantially resolved if the Commonwealth changed the indexation arrangements from the consumer price index to the measure of health inflation used by the Australian Institute of Health and Welfare.

But he conceded this was not a view shared by all.

Getting all the states to sign up to any agreement will be tricky.

It is understood Victoria is pressing for a package that would cost the Commonwealth at least $9 billion will sign up, and Western Australia is traditionally suspicious of deals struck by the eastern states.