counter the crap out of it. tell them how much you want to work there and how good the fit would be but that you really need to get it much closer to $x.xx amount before you could accept or it would be a step back and you just can't do that to yourself.
Oh, I'm going to counter the crap out of it, I just haven't settled on a number yet. The shot caller is an intelligent businessman, however, and I don't think he'll budge much, if any.
If they can't go up much in salary, consider asking them for more vacation (some companies will negotiate this and some won't) or other benefits (training opportunities?) but only if you really are going to take the job.
The guy I met with said that they would entertain increasing the benefits package, but my primary concern is making enough money to maintain some semblance of my current lifestyle with the soon to be additional expense of student loan payments. I won't be able to do that with what they offered. Two weeks of vacation a year suck, when I just got to four where I currently work, but money is the priority.
There are some other factors at play, such as the companies current growth, but I'm not comfortable discussing that further on here.
