Meetings between Gov. Tim Pawlenty and legislative leaders at the Capitol are going smoothly today, according to a source close to the negotiations who asked not to be named. All sides — the guv, Republicans, DFLers, House members, Senate members — met this morning and are set to meet again early this afternoon.

Some of the divisive issues — such as Pawlenty wanting to use money from a health care fund — have melted away somewhat, according to the source. But a sticking point remains on Pawlenty's desire for a property tax cap.

So, things appear sunny today, after a dust-up last night, on how to close the state's $935 million budget shortfall. But, the source warns, don't bet any money on an agreement just yet.