ST. PAUL &045; Minnesota’s leaders said Tuesday that local government aid must be reorganized to give more help to cities who need it, and that cuts, needed to help erase the state’s budget deficite, may be targeted at areas of the state that don’t need as much state aid.

The state’s legislative leaders and newly elected Gov. Tim Pawlenty spoke to reporters at an Associated Press-sponsored forum at the State Office Building, mainly about how the legislature was going to get itself out of a fiscal mess once it reconvenes next month.

Cities have been concerned that the state will pare down the amount of local government aid (LGA) that is doled out each year. That could put a financial crimp on cities like Albert Lea, which is heavily dependent on LGA.

Pawlenty said the aid

&uot;will be be on the table in some form&uot; and that the distribution of monies to cities and counties that are &uot;prospering&uot; will be reviewed.

&uot;The reason LGA exists … is to provide financial assistance to communities who don’t have a sufficient tax base,&uot; Pawlenty

said. &uot;We will be looking at it not so much as a random and arbitrary reduction … but more for those communities who need it the most.&uot;

House Speaker Steave Sviggum, R-Kenyon, agreed.

&uot;What we need to do is not scrap government aid, but not embrace it,&uot; he said. &uot;We need to look at a needs-based formula. We will continue LGA, but will continue based on needs, not what has been grandfathered,&uot; he said. The LGA formula is now largeley based on what local governments have recieved in the past, not on their current needs.

Senate Majority Leader John Hottinger, DFL-St. Peter, said cutting LGA doesn’t make sense, as it only &uot;masquarades&uot; as a tax increase.

&uot;It puts it back on the property taxpayers,&uot; he said. &uot;We need to evaluate the needs of those communities.&uot;

The sides differed on how the state was going to dig itself out of a $4.56 billion budget hole. However, all did have a common theme.

&uot;State government does not have the option to remain the same,&uot; said Pawlenty. &uot;It cannot and we cannot. The world has changed.&uot;

Sviggum was a bit more succinct.

&uot;This is the equivalent of a fiscal tornado, of a fiscal flood, of a fiscal blizzard,&uot; he said. &uot;It could get worse.&uot;

And although the three leaders had ideas, each admitted they didn’t have concrete answers.

&uot;I’ll be very honest with you … I’m not exactly sure,&uot; how to erase the deficit, Sviggum said. &uot;But there’s certain things we’re going to be looking at.&uot;

Hottinger said taxpayers should expect to pay the same amount of taxes, if not more. However, they shouldn’t expect state-supported services to remain at current levels. &uot;it’s going to be very difficult,&uot; he said. &uot;There are things that you rely on government to do that probably won’t get done. I know that without a tax increase, it will amount to a large difference in the way government is run.&uot;