MIDDLE CLASS AND CUTTING TAXES FOR THE MIDDLE CLASS.

>> ERIC: JOINING US NOW TO TALK BUDGET FORECAST AND MORE, DFL GOVERNOR TIM WALZ.

GOVERNOR, THANKS FOR BEING HERE.

YOUR MESSAGE TO THE DFL CONSTITUENCY GROUPS THAT WANT MORE MONEY, TEACHERS, DAY CARE ADVOCATES, ET CETERA.

>> WELL, FIRST OF ALL, THANK YOU, WE INVEST IN THE MIDDLE CLASS WHETHER IT'S CHILD CARE, INVEST YOU KNOW IN EDUCATION, MAKING SURE WE HAVE MEALS FOR THE KIDS AND INVESTING IN AN INFRASTRUCTURE THAT'S BEEN NEGLECTED FOR QUITE A WHILE.

BUT TO UNDERSTAND WITH A VOLATILE ECONOMIC ECONOMY GLOBALLY, WE SHOULD BE CAUTIOUS.

I THINK WE DO A BONDING BILL AND TRY TO KEEP SOME OF HOSE THINGS -- AGAIN, THIS IS AN OFF-YEAR, WE'LL HAVE A BUDGET BILL NEXT YEAR, WE'LL TRY TO KEEP THOSE THINGS MEASURED.

>> HOW TOUGH IS IT TO SAY NO, THOUGH?

>> YOU DO IT IN EVERY BUDGET BILL, WE'RE NOT SEEING THE BENEFITS OF THE THINGS LIKE PAID FAMILY MEDICAL LEAVE, WE'RE NOT SEEING CHILD TAX CREDIT REFLECTS THE GROWTH THAT WE'LL START TO SEE IN THE ECONOMY AND I THINK IT'S GIVE US TIME.

LET'S IMPLEMENT THE THINGS, MAKE A DIFFERENCE.

>> Cathy: AS YOU KNOW, MANY MORE PROGRAMS LOOK LIKE THEY NEEDED MORE MONEY THAN PLANNED FOR, SCHOOL WILL YOU KNOW.

>> IS ONE.

YOU DIDN'T SEE THAT COMING?

>> WE'VE GOT A LOT OF PEOPLE USING IT, I'M GLAD THEY ARE.

THIS IS NOT A BAD PROBLEM, IT'S A GOOD THING.

WE SAW A 17% INCREASE IN THE FIRST MONTH.

MOST OF THE DRIVERS F THIS ARE THINGS THAT WERE PRIOR TO THIS ELECTION LAYTIVE SESSION, DISABILITY WAIVERS WAS ABOUT HALF F IT.

WE SAW LESS SPENDING ON EMPLOYMENT INSURANCE FOR BUS DRIVERS, SO THESE THINGS START TO WORK THEMSELVES OUT.

BUT, LOOK, WE'RE NOT GOING TO GIVE TAX CUTS TO MILLIONAIRES SO WE CAN GET SCHOOL MEALS, IF THAT'S WHAT I HEARD THE OTHER DAY.

THESE ARE THINGS, YOU PUT THEM INSIDE IT S PARAMETERS AND SEE WHAT THE USAGE IS.

IF WE HAVE THIS MEAN FAMILIES USING THE PROGRAMS, THEN THEY NEEDED TO BE THERE IN THE FIRST PLACE AND THEY'RE WORKING.

>> IF YOU'RE LOOKING AT A STRUCTURAL SHORTFALL, ARE YOU LOOKING AT POTENTIALLY RAISING TAXES DOWN THE LINE?

>> LOOK, MINNESOTA DOES SOMETHING REALLY GREAT.

WE DO TWO BIENNIUMS.

THIS IS '26 AND '27, THREE LEGISLATIVE SESSIONS OUT.

THIS CURRENTS BIENNIUM WHICH WE'RE REQUIRED BY LAW, WE'RE RUNNING A SURPLUS.

WE DO SOMETHING THAT HAD NEVER HAD THE COURAGE DO DO BEFORE, WE ADDED INFLATION INTRO THIS.

WE COULD DISEASE SORT THE NUMBERS AND HOW THIS BEING $HIM 80 MILLION LEGS, LIKE THEY'VE DONE EVERY OTHER YEAR, WITH HE DIDN'T DO THAT.

WHEN WE SAW IN '20 AND '21, WE SAW THE NOVEMBER FORECAST TO THE FEBRUARY FORECAST FLUCTUATE ABOUT $8 BILLION IN THAT TIME.

THESE ARE FORECASTS.

I THINK IT WHAT IT TELLS US, WE'VE CUT TAXES FOR THE MIDDLE CLASS AND WE'VE INVESTED MORE HEAVILY IN THE MIDDLE CLASS THAN WE HAVE HAVE BUT TO BE CAUTIOUS AND WATCH THIS.

THE GLOBAL ECONOMY IS STILL STRUGGLING, UNITED STATES IS LUCKY THAT WE'RE IN AI MUCH BETTER PLACE THAN MOST OF THOSE BUT THIS TELLS YOU TO BE CAUTIOUS AND THIS IS HOW DO YOU UDGETING, I WILL COME BACK TO THAT AGAIN.

WE'VE NAVIGATED FIVE YEARS OF THIS IN A WAY THAT SOME OF THE MOST CHALLENGING ECONOMIC SITUATIONS AND WE'VE DONE SO RESPONSIBLY.

>> Eric: YOU DID GET ISSUED WALZ CHECKS, $260 AND UP, BUT THE IRS APPARENTLY A DEADLINE WAS MISSED BY THE STATE SO THAT THE IRS IS NOW GOING TO TAX IT AS FEDERAL INCOME.

>> YES.

>> Eric: SOMEBODY ASLEEP AT THE SWITCH THERE?

>> NO, NO.

>> Eric: SHOULDN'T YOU OR THE LEGISLATURE KNOWN THAT WAS COMING?

>> THEY SHOULD HAVE TAKEN THE DEAL A YEAR BEFORE THIS.

EVERY STATE DID THIS WE WERE TOP FOUR STATES FOR THE SIZE OF OUR CHECKS BUT THERE'S ABOUT 22 STATES GAVE SOME FORM OUT.

THOSE 22 STATES, SOME OF THEM GOT THIS THIS YEAR, WERE ABLE TO GET THE VARIANCE FROM THE FEDERAL GOVERNMENT, GET THE WAIVER FOR THE TAXES ON THIS.

BUT ON MAY 11th, ARBITRARILY, THEY CAME TO IT, THAT WAS THE END OF THE PANDEMIC, DECLARATION, THE EMERGENCY DECLARATION.

SO A ARBITRARILY PICKED EXHIBIT 11th, WE DIDN'T SIGN THE BILL UNTIL THE 24th.

>> Eric: WHY WASN'T IT IT SIGNED ON MAY 10TH?

>> YOU KNOW HOW THE LEGISLATION GOES, IT WAS A LAST-DAY DECISION BUT WE DIDN'T KNOW IT WAS COMING UNTIL THE I COULD AND EVERYTHING, THE LEGISLATURE, MARQUART, OURSELVES, WERE TOLD THESE WERE WAIVED FOR OTHER STATES, THERE WOULD BE NO REASON TO BELIEVE IT WOULD BE DIFFERENT BUT ALL THOSE OTHER STATES CAME BEFORE THE 11th.

NO OTHER STATES HAVE THESE IN THE HOPPER, WE WERE TALKING ABOUT THEM LONGER THAN ANY OTHER STATES.

YOU KNEW THESE THINGS WERE COMING AND I UNDERSTAND YOU HAVE TO PUT A RED LINE IN THERE BUT WHAT ARE YOU FEARFUL OF, IF YOU MOVED IT UNTIL THE 31st FOR US OR GAVE US A SPIRITS VERSUS THE LETTER OF THE LAW, WHAT DIFFERENCE WOULD THAT MAKE, THEY SAID WE HAVE TO STICK TO THIS.

WE'LL SEE, WE'LL CONTINUES TO WORK THEM, ASK THE GO LEGISLATORS TO THINK ABOUT A FIX.

I'M AS FRUSTRATED AS THEY ARE.

I UNDERSTAND DEADLINES HAVING TO BE THERE BUT, AGAIN, I'LL SAYS IF REPUBLICANS ARE BLAMING US ON THIS, THEN TAKE THE CHECKS IN '22.

LEGISLATURE DOES THE WORK IN NORMAL PROMISE, WE SIGNED IT 13 DAYS LATE.

>> Cathy: SPEAKING ABOUT THE NEXT SESSION, YOU WERE TALKING ABOUT IT BEING AN IMPLEMENTATION SESSION?

WHAT DOES THAT MEAN?

>> WEST NEEDS TO START GETTING THINGS GOING, WHERE HE NEED TO STARTS MAKING SURE, LIKE -- >> Cathy: LIKE PAID FAMILY LEAVE?

>> THOSE THINGS ARE GOING ON, WE HAVE THE CHILD TAX CREDIT THAT'S GOINGS, WE NEED TO GET OUT THERE, WE HAVE ALL KINDS OF PUBLIC-PRIVATE PARTNERSHIPS WORKING TO GET THE WORD OUT ON THAT, WE THEY WOULD TO PUT THOSE THINGS INTO PLACE.

WE NEED TO LOOK AND WE'VE IMPLEMENTED SCHOOL MEALS, THEY WERE THERE ON THE FIRST DAY OF SCHOOL READY TO GO, READY TO MAKE HAPPEN AND THEN I STARTED THINKING OF SOME OF THE THINGS WE WERE DOING AROUND AMENDMENT HAIR, ON LEAD PIPE REMOVAL, THOSE TIMES OF THINGS TO START SAYING, LOOK, OUR AGENTS SEEINGS ONLY HAVE SO MUCH TO BE ABLE TO DO, SO MANY PEOPLE TO PROCESS THINGS, LET'S IMPLEMENTS WHAT WE HAVE, LET'S TWEAK WHAT NEEDS TO BE TWEAKED, AND LET'S FOCUS AND PRIORITIZE.

THIS IS BASIC, BASIC BUDGETING AND I TRUST THE LEGISLATURE TO DO THAT.

I THINK SPIRE HORTMAN, LEADER DZIEDZIC ARE FOCUSING ON THAT AND I WOULD HOPE OUR REPUBLICAN FRIENDS WOULD COME BACK BECAUSE I WILL SAY ALL THIS SQUANDERING, A LOT OF THEM SHOWING UMM FOR RIBBON-CUTTINGS WHETHER THEY VOTED FOR IT OR NOT.

THEY TOLD YOU THEY WANT TO ROLL BACK, EVEN THOUGH WE DON'T HAVE A DEFICIT, ROLL BACK MEALS.

I THINK WE CAN COME TO A LOT OF AGREEMENTS ON THIS THESE ARE PROJECTS ACROSS MINNESOTA, DO A BONDING BILL, TWEAK THINGS, IMPLEMENT.

>> Eric: DOES IMPLEMENTATION INCLUDE MAKING SURE THAT MONEY THAT'S DOSE OUT ARRANGED THE STATE TO NONPROFITS THERE ARE SOME ACCOUNTABILITIES AND SOME PERFORMANCE -- FEEDING OUR FUTURE COMES TO MINDS AS ONE THAT GOT AWAY FROM YOU.

>> PEOPLE ARE GOING TO JAIL, RESTITUTION IS BEING MADE.

>> Eric: WHAT ABOUT ACCOUNTABILITY FOR THIS LUNGS OF MILLIONS OF DOLLARS HEADING OUTS?

>> ABSOLUTELY AND THAT'S WHY WE PUT FORWARD AND WERE ABILITY TO MOVE SOME OF THIS TO HAVE MORE -- THE INSPECTOR GENERAL PIECES OF THIS, TO MAKE SURE WE HAD MORE OVERSIGHT, THOSE ARE BEING IMPLEMENTED IN THERE.

A LOT OF THESE FOLKS, WE COUNTS ON MINNESOTA AS ONE OF THE ROBUST NONPROFIT SECTORS THAT PROVIDES FROM HOUSING TO MEALS, I WAS WITH A GROUP STOOD, PROVIDING LAPTOPS IN THE NORTHSIDE ACHIEVEMENT ZONE TO FOLKS.

THOSE ARE ALL THINGS GOING, PRIVATE-PUBLIC MONEY AND WE SHOULD ALWAYS BE THE BEST SWORDS OF THIS, WE HOULD ALWAYS BE PREPARED FOR THAT BUT WE SHOULD KNOW THERE'S ALSO CRIMINALS OUT THERE.

I KNOW THE ATTORNEY GENERAL IS PROSECUTING FOLKS FOR MEDICAID FRAUD THAT THEY CONTINUE TO TRY AND DO THAT.

WE SHOULD HAVE THE RIGHT PIECES IN PLACE, I THINK SOME OF THE CHANGES WE MADE AROUND THE NONPROFIT MONITORING ACCOUNTING, ACCOUNTABILITY, WILL HELP TRY AND STOP SOME OF THESE FOLKS AND IF THEY SHOULD DO IT, WE SHOULD PROSECUTE THEM TO THE FULL EXTENTS OF THE LAW.

WE GOT ANOTHER GUILTY PLEA TODAY.

>> Cathy: I WAS TALKING TO SPEAKER HORTMAN ABOUT THE UPCOMING SESSION AND SHE TALKED ABOUT, AS YOU HAVE SAID, BEING MEASURED IN TERMS OF LOOKING AT NEW SPENDING.

THE U OF M WANTS A LOT OF MONEY FOR THE MEDICAL SCHOOL AND THERE'S THAT WHOLE QUESTION ABOUT WHAT TO DO WITH THE U OF M HEALTH CARE SYSTEM.

FROM WHERE YOU SIT, WHAT SHOULD BE DONE?

>> FIRST, WE'LL HEAR BACK FROM 'EM, I'M INCREDIBLY GRATEFUL, GOVERNORS PAWLENTY AND DAYTON ARE HEADING UMM THAT COMMISSION OVER THERE THAT STARTS TO EXPLORE WHAT THIS LOOKS LIKE, CHALLENGING THEM TO DO THIS KNOWING THAT 70 TO 80% OF OUR PHYSICIANS ARE TRAINED THROUGH THE UNIVERSITIES HEALTH SYSTEM, IT IS A CROWN JEWELL BUT WE ALSO KNOW HEALTH CARE IN GENERAL IS VERY, VERY CHALLENGING SO TRYING TO SOLVE THIS INSIDE A VACUUM, OUTSIDE OF EALTH CARYL IS CHALLENGING SO FOR US, LET'S WAIT FOR THE RECOMMENDATIONS THAT COME OUTS OF THIS.

LET'S TRY AND SEE F WE CAN REWORK A DEAL BETWEEN FAIRVIEW AND THE "U" TO MAKE SURE WE CAN PROVIDE THE SERVICES NECESSARY AND MAKES SURE THIS IS A MOMENT, LIKE SO MANY THINGS, THESE ARE THANKS FOR MICHELLE MOMENTS WE HAD TO TRY TO LOOK AT WHAT THE FUTURE IS GOING TO LOOK LIKE.

MOST OF WHAT WE DID IS ABOUT BUILDING THAT WORKFORCE OF THE FUTURE, THINKING ABOUT INFRASTRUCTURE OF THE FUTURE, I THINK THAT'S WHAT THEY'RE DOING OVER THERE.

>> Eric: TELL US ABOUT THE PROGRESS YOU'RE MAKING ON THE MARIJUANA TSAR, YOU LOST ONE, THE MEDICAL MARIJUANA PERSON HAS LEFT.

2025 IS APPROACHING.

>> A LOT OF THAT WORK IS BEING DONE.

CHEST OAK TO GIVE A HUGE THANK YOU TO HER FOR THE WORK SHE'S DONE, SHE'S GONE ABOVE AND BEYOND.

MATH ZAPPIA CAME OVER AS A REGULATOR FROM COMMERCIAL.

I THINK ONE OF THE THINGS IS SHIFTING ON THIS, I THINK ORIGINALLY AND I GATHERED FROM ALL THE OTHER STATES, THAT THINGS THAT DIDN'T GO RIGHT WITH THEM, THIS ISSUE ABOUT YOU HAVE SOMEBODY IN THE INDUSTRY OR DO YOU HAVE A REGULATOR, I THINK WE ACKNOWLEDGED THAT WAS THE WRONG CHOICE IN THE BEGINNING.

RIGHT NOW WE'RE MOVING TOWARDS THAT REGULATOR.

WHAT'S HAPPENING OVER THERE WITH THE FOLKS THAT ARE DOING THE WORK, GETTING THE THINGS DONE, ALL OF THE MECHANICS OF SETTING UP THAT OFFICE ARE GETTING DONE SO WE'LL GET A DIRECTOR IN THERE AND MAKE IT.

>> Eric: YOU'RE THE NEW PRESIDENT OF THE DEMOCRATIC GOVERNOR'S ASSOCIATION.

IT'S A GREAT PLATFORM TO LOOK FOR YOUR POLITICAL FUTURE.

2026, '28 -- >> I'M IN IT TO HELP THE GOVERNORS, WE HAVE RACES ACROSS THE COUNTRY.

PERSONAL INCOMES ARE HIGHER, WE SEE ALL THESE THINGS THAT SEEMED TO WORK A LITTLE BETTER.

MIZE GOAL IS TO MAKE SURE WASHINGTON STATE, NORTH CAROLINA, POTENTIALLY MONTANA, ABOUT SEVEN OTHER KEEP A DEMOCRATIC GOVERNOR AND I THINK THE REASON I'M IN THIS, MY COLLEAGUES TRUST US IN THIS BUT IT'S THE MINNESOTA PIECE OF THIS THEY RECOGNIZE THAT LIFE WAS MADE BETTER FOR MOST MINNESOTANS, ESPECIALLY IN THE MIDDLE CLASS, BY A LEGISLATIVE SESSION THAT WENT TO THEIR PRIORITIES.

>> Eric: YOU'RE GOING TO HAVE TO BE SO PARTISAN, CAN YOU REACH ACROSS THE AISLE HERE IN MINNESOTA AND STILL HAVURE PARTISAN HAT ON AS I TRY TO ELECTS DEMOCRATIC GOVERNORS?

>> SURE, I SAID I'M NOT GOING TO CERTAINLY INDICATER TO HATE BUT I'LL TALK ABOUT TAXES, WHY WE THINK IT'S A GOOD THING TO DO A CHILD TAX CREDIT, INCREASE SCHOOL ACHIEVEMENT, ALL OF THOSE TYPE THINGS.

WE CAN REACH AND WE CONTINUE TO DO SO.

THAT'S GOING TO BE THE MESSAGE.

IT'S NOT REALLY MY STYLE TO THROW THE BOMBS AT THIS BUT I'M GOING TO BE VERY CLEAR, THESE ARE STATES THAT ARE GOING TO PROTECT REPRODUCTS IRV RIGHTS AND I'LL HELP THOSE FOLKS AND IF THAT'S BEING PARTISAN, I CAN'T DO ANYTHING ABOUT THAT.

>> Eric: WHAT ID YOU SAY, WHAT DID YOU SAY WHEN YOU SAW POLITICO CALL YOU A QUIETFUL POWERFUL GOVERNOR?

[Laughter] >> I DON'T KNOW IF THEY WERE SEARCHING FOR WHAT TO PUT IN THERE.

I THINK MY COLLEAGUES -- I M CERTAINLY PROUD THAT I HAVE A LARGE GROUP OF 23 OTHER GOVERNORS ANGING ROM CALIFORNIA TO MICHIGAN TO DELAWARE, BUT I THINK WHAT THEY SAW HERE IN MINNESOTA IS A LEGISLATURE THAT WE WORKED TOGETHER AND I THINK WHAT THEY WERE GETTING AT IS BUILDING PARTNERSHIPS INSIDE AND OUT, BUILDING BROAD COALITIONS TO SOLVE PROBLEMS AND THEY SAID LET'S TRY THIS ELSEWHERE.

>> Eric: THANKS FOR COMING OVER.

>> Cathy: HAPPY HOLIDAYS.