SAN FRANCISCO - Los Angeles Mayor Antonio Villaraigosa began laying the groundwork for a year of belt-tightening in the second-biggest U.S. city during his state of the city address Tuesday night.

"The budget I will submit next week will test our city leaders like never before," Villaraigosa said. "With the national recession catching Los Angeles in its wake, we now face an estimated general fund deficit of $406 million."

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