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Gov. Tim Pawlenty says the $1.2 billion deficit reported Wednesday in the current two-year state budget can be solved. He said he wants to work on it with lawmakers, but prefers to plug the gap with budget cuts. Don Davis / State Capitol Bureau

Pawlenty: More local aid cuts may be needed

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ST. PAUL - Gov. Tim Pawlenty may target local governments as he looks for ways to plug continued budget deficits.

Shortly after his aides announced that the current budget contains a $1.2 billion hole and the next two-year budget is $5.4 billion short, Pawlenty on Wednesday said his first action could be chopping a state payment due to local governments later this month.

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