>> "ALMANAC AT THE CAPITOL" IS A PRODUCTION OF TWIN CITIES PBS FOR THE STATIONS OF MINNESOTA PUBLIC TELEVISION ASSOCIATION.

>> Mary: THE GROWS SURPLUS HITS ANOTHER RECORD.

WE'LL TALK WITH THE BUDGET COMMISSIONER AND THE FINANCE CHAIR.

THAT'S COMING UP ON "ALMANAC AT THE CAPITOL."

♪♪ "ALMANAC AT THE CAPITOL" IS MADE POSSIBLE BY MEMBERS OF THIS PUBLIC TELEVISION STATION.

SUPPORT IS ALSO PROVIDED BY... MANITOBA HYDRO: PROVIDING CLEAN, RENEWABLE ENERGY TO MINNESOTA UTILITIES FOR MORE THAN 50 YEARS.

MANITOBAHYDROPOWER.COM.

ENBRIDGE: CONNECTING MINNESOTANS WITH ENERGY FOR OVER 70 YEARS.

MORE ON COMMUNITY IMPACT AND ENVIRONMENTAL PROTECTION AT ENBRIDGE.COM/MINNESOTA.

MINNESOTA LOTTERY: PLAYING OUR PART BY GENERATING FUNDS FOR MINNESOTA.

IF YOU'RE GAME, JUST SAY I'M IN.

GREAT RIVER ENERGY: PROVIDING WHOLESALE POWER TO 28 MINNESOTA ELECTRIC COOPERATIVES.

AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY: A TRIBAL NATION FOCUSED ON COMMUNITY AND COLLABORATION, ESPECIALLY IN TIMES LIKE TODAY.

>> MARY: WELCOME BACK TO "ALMANAC AT THE CAPITOL."

ERIC ESKOLA IS JOINING ME ON TONIGHT'S SHOW.

WE'LL TALK ABOUT THE BIG PROJECTED BUDGET SURPLUS WITH MINNESOTA'S MANAGEMENT AND BUDGET COMMISSIONER IN JUST A FEW MINUTES.

I TALKED WITH REPUBLICAN SENATOR JULIE ROSEN EARLIER TODAY ABOUT SENATE REPUBLICAN PLANS FOR THAT EXTRA CASH.

THIS WEEK'S RETIRING LAWMAKER TALKS ABOUT THE IMPACT OF RACIAL RECKONING ON HIS FINAL YEARS AT THE LEGISLATURE.

BUT FIRST, EARLIER THIS WEEK, ANOTHER RECORD STATE BUDGET FORECAST ANNOUNCMENT AMID GLOBAL FINANCIAL UNCERTAINTY.

>> IT'S A CHALLENGING TIME TO ISSUE A LONG-TERM FORECAST.

>> Mary: CHALLENGING, TO SAY THE LEAST, WITH INFLATION AND GEOPOLITICAL CONFLICT FROM RUSSIA POSING RISK TO THE FORECAST, SHOWING A STAGGERING $9 BILLION-DOLLAR FORECAST.

>> THE FORECAST IS NORMALLY A PRETTY SIMPLE AFFAIR, A IGHT UPDATE FROM THE NOVEMBER FORECAST.

HOWEVER IN THE LAST COUPLE YEARS, WE'VE SEEN A DIFFERENT PATTERN WITH A NUMBER OF CHANGES AND RISKS OUT IN THE ECONOMY AND IN NOTE FEBRUARY FORECAST HAS SEEN ITS SHARE OF CHANGES.

SOMETIMES IT'S HARD TO EVEN ANTICIPATE WHAT'S GOING TO HAPPEN NEXT MONTH, MUCH LESS NEXT YEAR.

>> HERE WE ARE WITH MAYBE THE BIGGEST CONFLICT SINCE WORLD WAR II IN EUROPE, WE'RE COMING OUT OF A GLOBAL PANDEMIC BUT WE HAVE TO SEE WHAT'S NEXT AND WE HAVE TO PREPARE FOR THAT AND I THINK IT'S GOOD TO BE PRUDENT.

>> Mary: THE GOVERNOR SAID HE'D TRIPLE HIS REBATE CHECK PROPOSAL, REPUBLICANS SAY RELIEF HAS TO BE PERMANENT.

>> TODAY'S FORECAST REALLY STRENGTHENS THE ARGUMENT FOR PERMANENT ONGOING TAX RELIEF TO WORKING MINNESOTANS AND SENIOR CITIZENS.

>> MINNESOTANS HAVE BEEN PAYING WAY TOO MUCH.

NOT BEST WAY TO STABILIZE EVEN'S BUDGET IS TO DO PERMANENT TAX RELIEF.

>> IF WE STAND HERE AND DON'T ADMIT THAT MINNESOTANS AREN'T SEEING THE SAME KIND OF SURPLUSES IN THEIR FAMILY BUDGETS, WE ARE TONE DEAF AND I THINK THAT'S SOMETHING I WOULD PUT ON THE GOVERNOR.

>> I THINK JUST A KNEE-JERK REACTION TO TELL THEM THIS IS JUST A GROSS OVER-TAXATION, I DO SAY THAT REVENUES ARE UP, SO LET'S RETURN IT AND I THINK THAT THERE IS A MIX HERE.

LET'S RETURN A CHUNK OF IT IN ONE TIME AND LET'S TAKE A STAB AT SOME OF THE WORKING CLASS FOLKS AND CUTS.

>> Mary: D.F.L.

LAWMAKERS WANT THE LARGEST TO BEING TO FRONT-LINE WORKERS.

>> I THINK OUR CAUCUS HAS BEEN AROUND THE STATE TALKING TO CHILD CARE, INSTITUTIONS OF HIGHER LEARNING.

>> WHAT THE REPUBLICANS WANT TOE DO IS THEY WANT TO GIVE MONEY BACK TO PEOPLE ONLY THROUGH THE TAX CODE AND NOT THROUGH OTHER WAYS THAT WE INVEST IN PEOPLE'S LIVES.

THEY'RE NOT TALKING ABOUT INCREASING RATES FOR CHILD CARE PROVIDERS, THEY'RE TALKING ABOUT USING THE TAX CODE WHICH RESULTS IN GIVING MORE MONEY TO PEOPLE WHO ALREADY HAVE MORE MONEY.

>> THIS IS A GOOD POSITION FOR MINNESOTA TO BE IN.

I WANT TO THANK ALL HE FOLKS OUT THERE OVER THE LAST COUPLE OF YEARS THAT HAS BEEN VERY DIFFICULT BOTH ECONOMICALLY FROM A HEALTH PERSPECTIVE AND THEN JUST SOCIALLY.

>> ERIC: JOINING US NOW TO TALK MORE ABOUT THE WALZ ADMINSTRATION'S PLANS FOR THE PROJECTED SURPLUS, MINNESOTA'S MANAGEMENT AND BUDGET COMMISSIONER JIM SCHOWALTER, WHO IS NOT NEW TO THIS JOB.

HE ALSO SERVED AS MMB COMMISSIONER UNDER GOVERNOR MARK DAYTON.

COMMISSIONER, ARE WE OVERTAXED?

>> WELL, THANKS FOR STARTING WITH AN EASY QUESTION, ERIC.

WHAT WE'RE REALLY SEEING RIGHT NOW IS A GREAT IMPROVEMENT IN THE ECONOMY FROM WHERE WE THOUGHT BEFORE.

I MEAN, THANKS TO THE WORK OF MINNESOTA WORKERS, MINNESOTA BUSINESSES, WE'VE GOTTEN TO A PLACE WHERE THE ECONOMY IS A PLACE WHERE WE NEVER WOULD HAVE THOUGHT JUST A YEAR OR TWO AGO.

THAT'S JUST GREAT ECONOMIC NEWS AND I THINK THAT'S THE PLACE TO START, IS THAT MINNESOTA HAS BEEN RESILIENT.

WE IGURED OUT HOW TO DEAL WITH THE COVID AND WE'RE DOING PRETTY WELL.

>> Mary: SO DO WE HAVE ROOM FOR NOT JUST ONE-TIME CHECKS WHICH YOUR BOSS ORIGINALLY PROPOSED BUT ALSO ONGOING TAX CUTS?

IS THERE ROOM IN THIS SURPLUS FOR THAT?

>> THERE IS A LOT OF MONEY, THERE'S NO QUESTION WITH OVER $9 BILLION IN PROJECTED SURPLUS THIS BIENNIUM, WE'VE GOT ROOM FOR ONE-TIME MEASURES AND SOME ONGOING MEASURES.

IN FACT THAT'S EXACTLY WHERE THE GOVERNOR STARTED, TO SAY THAT THERE ARE SOME IMPORTANT THINGS LIKE THE U.I.

PAYMENT, MAKING SURE WE PAY OFF THAT DEFICIT, MAKING SURE WE GET CHECKS IN THE POCKETS OFTEN FRONT-LINE WORKERS.

THERE IS SOME REALLY IMPORTANT ONE-TIME THINGS WE CAN DO ALONG WITH SOME REBATES, ALONG WITH SOME STRUCTURE CHANGES AND I THINK THAT'S THE MIX THAT WERE RELOOKING FOR FROM THE LEGISLATURE.

>> Eric: A COUPLE OF DAYS HAVE PASSED SINCE THE REVENUE FORECAST UNVEILING.

THE FORECAST IS BASICALLY AN EDUCATED GUESS ON HOW TAX RECEIPTS AND SPENDING ARE GOING TO GO MONTHS DOWN THE LINE, AND I'M WONDERING IF WE KNOW EACH JUST A FEW DAYS LATER, DO WE HAVE ANY BETTER IDEA ON HOW INFLATION IS GOING TO AFFECT THINGS?

I SEE THE CHAIR OF THE FED TODAY SAID IT'S GOING TO GO UP A QUARTER PERCENT IN MARCH.

DO WE KNOW ANYTHING MORE THAN WE DO ON FORECAST DAY?

>> SURE, EVERY DIE, YOU KNOW, YOU GETS NEW INFORMATION.

YOU KNOW, ONE OF THOSE THINGS ABOUT A FORECAST IS IT'S A SNAPSHOT.

IT'S A SNAPSHOT IN A POINT IN TIME GIVEN EVERYTHING THAT WE KNOW AT JUST THAT POINT IN TIME AND TOMORROW WE LEARN SOMETHING NEW.

THAT'S WHAT WE KEEP ON DOING.

THE GOOD NEWS IS THAT WE WERE ANTICIPATING SOME OF THESE CHANGES AND THE OTHER GOOD PIECE IS THAT, YOU KNOW, OUR LEADERS HAVE JUDGMENT.

I THINK THE KEY THING IS UNDERSTANDING WHERE WE'RE GOING, WHAT ARE THOSE RISKS AND CONTINUE TO PLAY OFF THOSE THINGS SO THAT WE MAKE SOME SMART DECISIONS.

>> Mary: AND WHEN THIS FORECAST WAS PUT TOGETHER, WE DID NOT KNOW WHAT RUSSIA WAS GOING TO DO SO WHAT DO YOU KNOW, LIKE ERIC SAID, A FEW DAYS IN NOW, WHAT DO WE HAVE A SENSE OF HOW THE GLOBAL ECONOMY COULD AFFECT THE STATE ECONOMY?

>> OH, THAT'S GOING TO TAKE A LITTLE WHILE, MARY.

AS I SAID ON FORECAST RELEASE, OUR NATIONAL ECONOMIC FORECASTERS, THEY DO A GREAT JOB LOOKING ACROSS THE BOARD, ACROSS THE WHOLE ORLD AND TRY TO ANTICIPATE WHAT'S COMING.

THEY GAVE THAT TO US IN EARLY FEBRUARY, AND IN THAT FORECAST, THEY WEREN'T ANTICIPATING THAT RUSSIA WOULD BE INVADING KRAINE, SO, YOU KNOW, THERE IS A LOT OF VOLATILITY AND THERE IS A LOT OF COMPENSATING FACTORS THAT ARE GOING TO HAPPEN EACH AS WE WORK OUT WHAT HAPPENS WITH THAT WAR, WHAT HAPPENS WITH THE SANCTIONS IN RUSSIA.

IT'S GOING TO TAKE MONTHS.

IF YOU THINK BACK TWO YEARS, THINK ABOUT HOW LONG IT TOOK US TO REALIZE ALL THE DIFFERENT EFFECTS THAT COVID WAS GOING TO HAVE ON OUR ECONOMY AND ALL THE ADJUSTMENTS WE COULD TAKE IN ORDER TO KEEP THINGS MOVING.

THAT'S PART OF WHAT HAS HAPPENED OVER THE LAST TWO YEARS WITH COVID AND I'M SURE IT'S GOING TO TAKE A LITTLE WHILE TO SORT OUT WHAT'S HAPPENING WITH THE RUSSIAN INVASION OF UKRAINE.

>> THE ROJECTED NUMBER OF THE SURPLUS S NINE-POINT-SOMETHING BILLION, BUT FOR THE FOLKS AT HOME, IT MIGHT BE GOOD FOR THEM TO KNOW THAT THERE ISN'T NINE BILLION IN A BANK ACCOUNT SOMEWHERE, WHAT IS THERE, 4 BILLION IS THAT WHAT'S IN THE BANK?

I'M TRYING TO REMEMBER MYSELF.

>> THAT'S EXACTLY IT, ERIC.

WHAT WE DO IN THE FORECAST DOESN'T MEAN WE HAVE ALL THE CASH ON HAND.

IT'S LOOKING OUT OVER THE NEXT 16 MONTHS AND SAYING, OVER THOSE MONTHS, WE EXPECT TO TAKE IN THIS MUCH.

WE EXPECT TO SPEND THIS OTHER MONEY AND WITH THE MONEY THAT WE HAVE IN HAND, THIS IS WHERE WE EXPECT TO END.

THERE IS A LOT OF ASSUMPTIONS THAT GO INTO THAT, A LOT OF RISK THAT GOES INTO IT AND WE'RE PRETTY GOOD AT IT BUT, STILL, YOU KNOW, IT IS A PROJECTION.

WE DO HAVE LOT OF CASH ON HAND.

WE FINISHED THE LAST FISCAL YEAR WAY UP BECAUSE OF THE THINGS AND THE ACTIVITY THAT WAS GOING ON IN MINNESOTA IN '21, IN FISCAL YEAR '21.

SO THAT IS MONEY IN THE BANK AND THAT REALLY IS THE BASIS FOR THIS SURPLUS.

>> Mary: ET'S TALK MORE ABOUT THE BASES.

WE KNOW CORPORATE PROFITS ARE UP, SOME OF THE MONEY CAME FROM THE COMES BUT A LOT OF FOLKS ARE WONDERING HOW MUCH OF THIS CAME FROM THE FEDERAL GOVERNMENT.

HOW MUCH OF THIS IS A RESULT OF MINNESOTANS AND CORPORATION SPENDING AND THE ECONOMY PICKING P AND HOW MUCH IS THAT HUGE INJECTION OF FEDERAL MONEY?

>> YOU KNOW, THAT'S A GREAT QUESTION AND I PROBABLY -- THERE'S GOING TO E Ph.D. PAPERS WRITTEN ON THIS FORTY NEXT DECADE BECAUSE THERE'S REALLY TWO ANSWERS.

THE EASY ANSWER IS NONE OF THAT FEDERAL MONEY, OR VIRTUALLY NONE OF THAT MONEY IS REALLY SHOWING UP IN THIS FORECAST.

THE LEGISLATURE TOOK A LITTLE BIT OF IT AND MADE SURE WE USED SOME OF IT FOR FISCAL STABILIZATION LAST YEAR BUT BY AND LARGE, WE PUT THAT MONEY OFF TO THE SIDE AND SPENT IT SEPARATELY.

SO IT DOESN'T SHOW UP IN THE NUMBERS.

BUILT THE KEY THING, THE REALLY KEY THING IS THAT THE NEED GOVERNMENT GAVE US ALL CONFIDENCE AT A TIME WHEN WE NEEDED CONFIDENCE.

WE KNEW WE COULD FIGHT COVID, WE NEW WE COULD GET PPE, THE ECONOMY WOULD STABILIZE.

THE PPE WORK, ALL THAT FUNDING WENT OUT FOR BUSINESSES, .I., ALL THOSE THINGS HAPPENED AND THAT GAVE PEOPLE CONFIDENCE TO DO WHAT THEY COULD AND, AS A RESULT, WE'RE IN A MUCH BETTER PLACE.

>> Mary: WHAT SECTORS ARE PERFORMING WELL.

CAN CAN YOU SLICE OUT WHAT BUSINESSES AND SECTORS ARE PERFORMING WELL IN THE STATE?

>> A LOT OF CORPORATIONS ARE DOING REALLY, REALLY WELL.

I THINK WHAT WE -- THE EASIER QUESTION TO ANSWER, IF I MAY, IS JUST, YOU KNOW, WHERE ISN'T IT GOING.

HOSPITALITY, A LOT OF THE PLACES WHERE IN-PERSON, THOSE ARE THE THINGS THAT HAVE BEEN WE'LL DESIGNATED -- DECIMATED BECAUSE YOU DIDN'T REALLY SUBSTITUTE A WORKER TO PHONE IN FROM HOME TO BE ON ZOOM, YOU HAVE TO BE THERE IN PERSON AND SO THOSE BUSINESSES DURING THE LAST COUPLE YEARS HAVE BEEN HURT.

THERE'S NO QUESTION ABOUT IT.

NOT EVERYONE HAS DONE AS WELL.

AS OF THAT, THAT'S I THINK THE POLICY QUESTION AHEAD OF US IS HOW DO WE USE THIS SURPLUS?

HOW DO WE USE THE $9 BILL ONE TO MAKE SURE WE CAN BOTH REWARD THE PEOPLE WHO ALLOWED US TO GET THROUGH THIS TIME AND ALSO SO THAT E HAVE SOME MOMENTUM TO KEEP IT GOING.

>> Eric: BUT MUCH OF THIS MONEY IS NOT ONGOING, IT'S LIKE A ONE-SHOT, ONE-TIME MONEY.

HOW DOES THAT INFORM POLICY-MAKERS AS THEY LOOK DOWN THE ROAD?

>> NEVER SAID IT WAS EASY.

YOU KNOW, YOU'RE ABSOLUTELY RIGHT.

THERE'S SOME THINGS I THINK WE CAN DO THAT ARE SMART INVESTMENTS RIGHT NOW.

THERE ARE SOME SMART INVESTMENTS THAT WE COULD DO ONGOING, TALK TO ANY PARENTS AND THE STRESS THAT THEY'RE UNDER WHETHER IT'S CHILD CARE, TRYING TO HELP THEIR KIDS, FIGURE OUT HOW TO KEEP GOING IN SCHOOL.

THOSE ARE THE KIND OF THINGS THAT THE GOVERNOR AND LIEUTENANT GOVERNOR PUT ON THE TABLE SO THAT WE COULD NOT ONLY JUST HELP THINGS NOW BUT ALSO REBALANCE AND MAKE SURE THAT WE KEEP THINGS GOING INTO THE FUTURE.

>> Mary: I'M SURE YOU'VE HERALD THE SHEER POLITICS, A HANDFUL OF REPUBLICANS DO JUST WANT TO TAKE THIS TO THE ELECTION AND LEAVE THIS MONEY AND NOT SPENDS IT NOW IN HOPES THAT REPUBLICANS CAN WIN THE HOUSE, SENATE, GOVERNOR'S RACE.

WHAT HAPPENS IF THIS $9 BILLION GOES UNSPENT?

>> VERY LITTLE OULD HAPPEN.

WE WOULD HAVE A LOT OF MONEY IN THE BANK.

WE WOULD HAVE A LOT OF MONEY SITTING THERE AND A LOT OF PEOPLE WOULD HAVE PROBLEMS, WHETHER IT'S BECAUSE OF THEIR BUSINESSES WOULD HAVE TAXES GO UP BECAUSE OF THE U.I.

TRUST FUND, WHETHER IT WOULD BE BECAUSE THEY MADE IT THROUGH THE LAST COUPLE YEARS WEARING PPP AND -- OR PPE AND DIDN'T HAVE ANY HELP AND THEY'RE GETTING TIRED AND STRESSED OUT OR WHETHER IT'S BECAUSE THE SCHOOLS OR THE CHILD CARE CENTERS ARE CLOSING.

THERE IS A LOT OF THINGS WE NEED TO GET DONE.

>> Mary: THANK YOU SO MUCH, COMMISSIONER.

APPRECIATE YOUR TIME.

>> THANK YOU.

CLEAR ♪♪ >> REPUBLICAN SENATE FINANCE CHAIR, SENATOR JULIE ROSEN, THANKS FOR JOINING US TO TALK FIRST ABOUT THE BUDGET FORECAST AND I WANT O START WHERE THE QUESTION OF INFLATION BECAUSE WE BOTH HAVE BEEN AROUND A LONG TIME AND NEW INFLATION WAS TAKEN OUT OF THE FORECAST BUT INFLATION IS REALITY IN OUR ECONOMY.

WHAT DO YOU THINK THE REAL NUMBER IS?

>> WELL, THAT'S A GOOD QUESTION BUT I STILL THINK, EVEN IF WE DID COUNT WITH THAT, IT'S STILL NOT A CORRECT NUMBER SO WE'RE GOING TO JUST DEAL WITH WHAT WE HAVE IN FRONT OF USISM I THINK THE REAL QUESTION IS HOW MUCH DID THE FEDERAL FUND AFFECT THE STATE BUDGET AND I'M NOT SURE IF WE'LL EVER GET THE ANSWER TO THAT.

>> Mary: DO YOU HAVE A SENSE OF PERCENTAGE, DO YOU THINK IT'S A LARGE PERCENTAGE OF FEDERAL FUNDS AND ONE-TIME FUNDS, THEN, AS WELL?

>> WELL, WEIGHED A HEARING ON THIS THE OTHER DAY AND THERE WAS $72 BILLION THAT CAME INTO THE STATE FROM THE FEDERAL GOVERNMENT.

11.7 BILLION OF THAT WAS USED DIRECTLY FOR OUR BRIDGE EITHER AND THE REST WAS INCORPORATED IN OTHER WAYS.

THAT'S A STAGGERING AMOUNT OF MONEY THAT'S BEEN PLACED INTO THE ECONOMY SO IT MUST HAVE SOME KIND OF EFFECT ON THIS STATE FORECAST.

>> Mary: SO IS IT SAFE TO DO DEEP, PERMANENT TAX CUTS IF THIS IS REALLY FEDERAL MONEY APPEARED MAYBE NOT SUSTAINABLE.

>> WELL, THE TAX CUTS MEAN MORE MONEY INTO THE AVERAGE AMERICAN -- AVERAGE MINNESOTAN TAXPAYER SO THAT'S GOING TO BE BACK INTO THE ECONOMY AND THAT WILL STABILIZE THE ECONOMY.

WE DEAL WITH A TWO-BUDGET CYCLE GOING FORWARD BUT AS THE NUMBERS SHOWED FROM I.H.S., IS THAT THE INFLATION DOES GO DOWN WITH THE ENGINEERS OUT SO I THINK AN JOHN GOING TAX CUT IS VERY PRUDENT AND WE ARE GIVING THAT MONEY BACK TO THE PEOPLE THAT DESERVE TO GET IT BACK.

>> Mary: WHAT ABOUT A MIX BECAUSE THE GOVERNOR SAID HE WOULD INCREASE HIS ONE-TIME CHECKS, TRIPLE THEM AND DO PERMANENT RELIEF POTENTIALLY.

SENATE INTERESTED IN DOING BOTH?

>> THERE'S ALWAYS COMPROMISE AT THE VERY END AS YOU KNOW, MARY, YOU'VE BEEN HERE A LONG TIME, TOO, SO WE'LL DEFINITELY HAVE A COMPROMISE BUT THE MAIN THING EOPLE ARE SAYING GIVE IT BACK AND GIVE IT BACK TO THE PEOPLE THAT CREATED THIS SURPLUS.

>> Mary: SO IS IT A FAIR EXPECTATION VOTERS SHOULD SEE SOME FORM OF REBATES AND/OR PERMANENT CUTS?

>> YES, I THINK THERE IS A VERY FAIR EXPECTATION OF THAT.

WE JUST DON'T WANT TO CREATES THE WINNERS AND LOSERS BY GIVING EVERYONE SOMETHING.

THE TAXPAYERS CREATED THIS SURPLUS, THE TAXPAYERS SHOULD GET THE MONEY BACK.

>> Mary: AND WHAT ABOUT PUTTING SOME OF THAT SURPLUS TO UNEMPLOYMENT INSURANCE, BUSINESSES ARE GETTING VERY CLOSE TO HAVING TO PAY ON THAT.

>> YEAH, SENATE REPUBLICANS DID THEIR JOB, WE COMMITTED TREMENDOUS AMOUNT OF MONEY, 2.7 BILLION TO CREATES -- TO NOT ONLY PAY OUR DEBT, HICH IS $50,000 A DAY TO THE FEDERAL GOVERNMENT BUT TO ALSO TO CREATE A CUSHION IN THAT FUND JUST IN CASE SOMETHING ELSE HAPPENS.

WE NEED TO HAVE THAT CUSHION.

WE'VE DONE OUR JOB.

WE'RE JUST WAITING FOR THE HOUSE AND THE GOVERNOR TO REACT.

>> Mary: WHAT ABOUT THE POLITICAL THEORY THAT REPUBLICANS LIKE THEIR CHANCES SO MUCH IN THESE MID-TERMS AND THINK THEY COULD TAKE OVER THE HOUSE, THE GOVERNOR'S RACE, HOLD ON TO THE SENATE AND HOLD ON AND HAVE THAT $9 BILLION TO WORK WITH NEXT SESSION?

>> THAT'S A VERY GOOD REALITY, ACTUALLY, MARY, AND I THINK IT'S -- IT WOULD BE WELCOMED IN THE FACT THAT DIVIDED GOVERNMENT IS GOOD.

HOWEVER, IT'S BEEN VERY DIFFICULT TO CARRY ON SOME CONSERVATIVE MEASURES WHICH I THINK HALF THE STATE ABSOLUTELY WANTS WITH A ONE-VOTE MARGIN.

SO IT'S MPERATIVE THAT WE CONTINUE A BALANCE IN THIS STATE AND I THINK THE HOUSE REPUBLICANS HAVE A VERY GOOD CHANCE OF TAKING THE MAJORITY AND WE HAVE SOME GREAT CANDIDATES FOR THE GOVERNORSHIP.

>> Mary: SO WOULD IT MAKE SENSE TO HOLDS ON TO THE MONEY THEN AND REPUBLICANS WANT TO NOT DO ANYTHING THIS SESSION AND NOT CT OR DO YOU HAVE TO DO SOMETHING WITH THIS SURPLUS?

>> I DON'T THINK WE HAVE TO DO SOMETHING.

IF WE CAN GET TO A COMPROMISE, THAT'S GREAT, BUT SERIOUSLY, THE RANCOR OUT IN THE DISTRICT THAT I SERVE IS TO PLEASE GIVE THAT MONEY BACK.

- WE CREATED THIS, WE NEED THE MONEY BACK.

GAS PRICES ARE GOING UP, EVERYTHING -- INFLATION IS GOING UP.

ALL ACROSS THE BOARD, THE ENERGY COSTSs, IT MAKES SENSE TO GIVE THAT BACK INTO THE POCKETS OF OUR EVERYDAY HARD-WORKING MINNESOTANS.

♪♪ ♪♪ ♪♪ >> ERIC: UP NEXT IS THIS WEEK'S INSTALLMENT OF MARY'S SERIES OF RETIRING LAWMAKER PROFILES.

DFL STATE REPRESENTATIVE JIM DAVNIE REFLECTS ON TWO DECADES OF REPRESENTING ONE OF MINNESOTA'S MOST DIVERSE CONSTITUENCIES DURING A TIME OF RACIAL RECKONING.

>> Mary: FIRST QUESTION FOR ALL THE RETIREES, WHY NOW?

>> IT WAS TIME.

WE DON'T USE THE "R" WORD IN MY HOUSEHOLD, RETIRE.

THIS IS NOT RUNNING FOR REELECTION, IT'S NOT RETIRING.

>> Mary: DO YOU EXPECT MORE YOUTH AND DIVERSITY TO REPLACE YOU?

>> YES, ON BOTH COUNTS.

>> Mary: THE LAST CLASS THAT CAME IN WAS OUR MOST DIVERSE AND YOUNGER, AND IT CHANGES THE DYNAMIC OF THE BODY.

WHY IS THAT IMPORTANT AND WHY IS THAT IMPORTANT IN SOUTH MINNEAPOLIS?

>> WELL, I COME FROM A SAFE D.F.L.

DISTRICT AND WHOEVER REPLACES ME WILL LIKELY IS GOING TO VOTE IN WAYS THAT ARE VERY SIMILAR TO THE WAYS THAT I'VE BEEN VOTING.

AT THE SAME TIME, IT MATTERS WHO GETS ELECTED.

THEIR LIFE EXPERIENCE VERSUS MY LIFE EXPERIENCE INEVITABLY DIFFERENT.

>> Mary: MINNEAPOLIS HAS BEEN THROUGH A LOT, A LOT OF SOUL-SEARCHING, QUESTIONING, ANGST.

WHAT DO YOU THINK WE'VE LEARNED FROM IT?

WHAT DO YOU THINK YOUR COMMUNITY HAS LEARNED AND WHAT DIRECTION DO YOU THINK IT NEEDS TO GO?

>> YOU KNOW, AFTER THE POLICE MURDER OF GEORGE FLOYD, AND THE RESULTING CIVIL UNREST, I WAS ENGAGED IN A LOT OF CONVERSATIONS IN THE COMMUNITY, ONE-ON-ONES, SMALL GROUPS, LARGE GROUPS WHERE I SAW PARTICULARLY MY WHITE NEIGHBORS MAKING THEMSELVES REMARKABLY VULNERABLE AROUND ISSUES OF RACE.

THEY HAD HAD AN AWAKENING TO THINGS THAT THEY -- I'M NO DIFFERENT, POWERFUL, POWERFUL CONVERSATIONS THAT I THINK CHANGED A LOT OF PEOPLE'S LIVES.

>> Mary: IS THAT MOMENTUM STILL THERE?

>> IN THE POLITICAL REALM HERE, IT'S TRYING TO FIND WHAT'S THE FORM THAT IT SHOULD TAKE.

HOW DO I TAKE THAT UNDERSTANDING THAT I HAD ND WHAT DO I DO WITH THAT?

AND I THINK THERE'S A MEANINGFUL AMOUNT OF TRAUMA OUT THERE AMONGST MY CONSTITUENTS.

>> Mary: HOW ABOUT HOW IT IMPACTS THE AREAS THAT HAVE KIND OF BEEN YOUR SPECIALTY, THINGS LIKE EDUCATION, EARLY CHILDHOOD EDUCATION?

>> I'VE ALWAYS HAD A LENS OF RACIAL EQUITY IN THE WORK THAT I'VE DONE AROUND EDUCATION, REPRESENTING MINNEAPOLIS, CERTAINLY COMPELS THAT BECAUSE IT'S THE MOST DIVERSE SCHOOL DISTRICT IN THE STATE.

I THINK IT IS HEIGHTENED AS WE CONTINUE TO STRUGGLE WITH TRYING TO BETTER UNDERSTAND WHAT DO WE NEED TO DO DIFFERENTLY IN EDUCATION TO GET MORE EQUITABLE OUTCOMES?

I ALSO THINK ABOUT WHAT DO WE NEED TO DO OUTSIDE OF EDUCATION, WHEN YOU REPRESENT A SCHOOL DISTRICT THAT'S -- IN ANY GIVEN YEAR, ABOUT 8% OF THE KIDS QUALIFY AS HOMELESS AND YOU HAVE ANY APPRECIATION OF THE IMPACT THAT THAT HAS ON A CHILD?

YOU'RE NOT GOING TO SOLVE THE ACHIEVEMENT GAP UNTIL YOU SOLVE CHILDHOOD HOMELESSNESS.

>> Mary: YOU KNOW, MINNESOTA STANDS OUT AND WE'RE OFTEN PROUD OF HOW HIGHLY WE RANK IN SO MANY MEASURES BUT WE ALSO HAVE REALLY STRUGGLED WHEN IT COMES TO ACHIEVEMENT GAP.

>> UH-HUH.

>> Mary: OPPORTUNITY GAP, HOUSING GAP.

THOSE ARE STILL THINGS WE HAVE NOT MADE A GREAT DEAL OF PROGRESS.

WHY CAN'T WE BREAK THROUGH AND MAKE PROGRESS ON THAT WHEN WE DO SO WELL IN SO MANY CATEGORIES?

>> PARENTS ARE UNDER A GREAT DEAL OF STRESS.

MY KID THAT IS TO ACHIEVE, MY KID HAS TO EXCEL AND THE ONLY MEASURE WE USE OF THAT IS WHAT IS THEIR MCA SCORE OR THEIR A.C.F.

SCORE, WHEN IN FACT THAT'S JUST ONE MEASURE.

>> Mary: ARE WE SELFISH NOW, IS THAT THE PROBLEM ON SO MANY OF THESE ISSUES, IS THERE A SELFISHNESS?

>> I'M HESITANT TO CALL IT SELFISH, IT'S THAT SCARCITY MINDSET.

MY KID HAS TO BE AT THE TOP AND I'M GOING O SHARP ELBOW ANY OTHER KID BACK FOR MY KID BECAUSE LIFE IS UNCERTAIN AND IT FEELS TO A LOT OF FAMILIES LIKE WE'RE SENDING OUR KIDS OUT ON A TIGHTWIRE WITHOUT A NET UNDERNEATH THEM.

>> Mary: SO CAN THE LEGISLATURE STILL BE A PLACE OF SOLUTIONS?

>> I THINK WITH THE COMMUNITY, YES, BUT IT TAKES LEADERSHIP, IT TAKES SOME COURAGE AS AN URBAN LEGISLATOR, I'VE SPENT A LOT OF THE LAST 21 YEARS EXPLAINING THE REST OF MINNESOTA TO MY CONSTITUENTS.

AND WHAT THEY NEED AND WHY THEY NEED IT AND HOW THEY'RE DIFFERENT AND WHY WE NEED TO DO THINGS DIFFERENTLY IN GREATER MINNESOTA THAT HE WE DO IN HE METRO AREA.

WE NEED GREATER MINNESOTA TO DO THE SAME THING WITH URBAN MINNESOTA.

>> Mary: WHAT'S YOUR ADVICE, YOUR PARTING ADVICE?

>> YOU KNOW, THERE STILL IS SOMETHING TO BE SAID OR THOSE RELATIONSHIPS ACROSS THE AISLE.

ENGAGING WITH THOSE GROUPS WHO CAN HELP YOU BUILD THE COALITIONS.

DECIDE HAT ISSUES YOU CARE ABOUT AND THEN FIND THE GROUPS THAT ARE WORKING ON THOSE ISSUES AND WHO ARE PUTTING PEOPLE ON THE GROUND IN DISTRICTS OUTSIDE OF SOUTH MINNEAPOLIS AND TALKING TO VOTERS.

YOU KNOW, THE SECRET IS, AND YOU KNOW THIS, IT DOESN'T TAKE THAT MANY CONTACTS FROM CONSTITUENTS TO GET AN ELECTED OFFICIAL'S ATTENTION.

ELECTED OFFICIALS USUALLY LISTEN AND SO THE MORE OF THAT ENGAGEMENT, THE MORE CONFIDENT I AM IN THE FUTURE OF MINNESOTA.

>> WHEN I THINK OF DETTMER, I THINK MILITARY AND I THINK SERVICE.

>> A KEY WORD THAW JUST MENTIONED WAS SERVICE.

WHEN I GOT OUT OF HIGH SCHOOL IN '69 AND I WENT DOWN, I WAS GOING TO ENLIST RIGHT AWAY AND MY DAD SAID, NO, YOU GOT A SCHOLARSHIP TO GO TO COLLEGE.

AND I COMPETED AND GOT MY EDUCATION, GOT MY TEACHING DEGREE BUT I GOT INTO TEACHINGS AND JUST A FEW YEARS AFTER, THAT I STARTED TALKING TO ALL THESE RECRUITERS WERE COMING INTO MY SCHOOL TO TALK ABOUT MY ATHLETES THAT I WAS COACHING AND I ALWAYS HAD IN THE BACK OF MY MIND, I WANTED TO SERVE.

I WAS 33 YEARS OLD WHEN ENLISTED.

SOME OF MY STUDENTS WENT OFF TO COLLEGE, TOO, OR WENT OFF TO WEST POINT AND SO FORTH.

OUR SONS WENT TO WEST POINT.

I WAS OLDER THAN MY DRILL SERGEANTS WHEN I WAS GOING THROUGH ALL THE TRAINING AND EVERYTHING.

I GOT TO SALUTE MY SONS.

WHEN THEY COME HOME, THEY'RE LIEUTENANT COAL NELS.

THEY FEEL RANK ON ME.

>> ERIC: THAT'S OUR SHOW FOR TONIGHT.

THANKS TO MARY AND THE PRODUCERS FOR LETTING ME JOIN IN THE FUN THIS WEEK.

MARY WILL BE BACK NEXT WEEK WITH THE LATEST FROM THE LEGISLATURE.

IF YOU MISSED PART OF TONIGHT'S SHOW, OR WANT TO RE-WATCH ANY EPISODES FROM THE PAST, HEAD TO OUR WEBSITE, TPT.ORG/AATC.

DON'T FORGET TO FOLLOW "ALMANAC" ON FACEBOOK.

LOOK FOR SESSION UPDATES AND MORE FROM OUR TEAM ON TWITTER.

THAT'S ALL AT TPT.ORG/AATC.

WHEN THE LEGISLATURE IS IN SESSION, YOU CAN FOLLOW HOUSE AND SENATE FLOOR ACTION, COMMITTEE HEARINGS AND MORE ON THE PBS STATION YOU ARE WATCHING RIGHT NOW.

MAKE SURE TO TUNE IN TO "ALMANAC" ON FRIDAY NIGHT.

CATHY AND I WILL TALK WITH MIKE OSTERHOLM ABOUT UPDATED COVID PROTOCOLS.

WE'LL INTRODUCE YOU TO A NEW TPT DIGITAL SERIES, AND HAVE MUCH MORE ON THE BUDGET SURPLUS.

AND MARY WILL TAKE A LOOK AT THE PROPOSED CONVERSION THERAPY BAN AT THE LEGISLATURE.

THAT'S OUR SHOW.

THANKS FOR WATCHING.

GOOD NIGHT.

♪♪ Captioned by: Paradigm Reporting/Captioning www.paradigmreporting.com BL AZE BLAZE BLAZ BLAZ CLEAR "ALMANAC AT THE CAPITOL" IS MADE POSSIBLE BY MEMBERS OF THIS PUBLIC TELEVISION STATION.

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MANITOBAHYDROPOWER.COM.

ENBRIDGE: CONNECTING MINNESOTANS WITH ENERGY FOR OVER 70 YEARS.

MORE ON COMMUNITY IMPACT AND ENVIRONMENTAL PROTECTION AT ENBRIDGE.COM/MINNESOTA.

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IF YOU'RE GAME, JUST SAY I'M IN.

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AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY: A TRIBAL NATION FOCUSED ON COMMUNITY AND COLLABORATION, ESPECIALLY IN TIMES LIKE TODAY.

"ALMANAC AT THE CAPITOL" IS A PRODUCTION OF TWIN CITIES PBS FOR THE STATIONS OF MINNESOTA PUBLIC TELEVISION ASSOCIATION.