>> CATHY: WE HAVE A FULL SHOW FOR YOU TONIGHT.

GOVERNOR TIM WALZ IS HERE, A DUO OF LEGISLATIVE LEADERS, ST. PAUL PIONEER PRESS REPORTER FRED MELO HAS AN UPDATE ON THE ST. PAUL BUDGET, STAR TRIBUNE'S RACHEL BLOUNT HAS AN UPDATE ON THE NEW WOMEN'S PRO HOCKEY LEAGUE... >> ERIC: WE'LL TALK WITH THE GOVERNOR IN JUST A COUPLE OF MINUTES.

WE START WITH THE BUDGET SURPLUS ANNOUNCEMENT EARLIER THIS WEEK, MUCH SMALLER THAN THIS TIME LAST YEAR, WITH A WARNING OF A DEFICIT ON THE HORIZON.

MARY LAHAMMER PICKS UP THE STORY FROM THERE.

>> THANK YOU TO THE PEOPLE OF MINNESOTA, HARD-WORKING FOLKS WITH VERY HIGH LABOR PARTICIPATION RATES, AN ECONOMY THAT CONTINUES TO GROW, PRODUCING JOBS, SOME OF THE HIGHEST PER CAPITA INCOMES IN THE COUNTRY.

AND OVERALL, VERY SOLID.

[Cheering] >> Mary: AFTER DEMOCRATS SPENT BILLIONS OF THE RECORD $17 BILLION SURPLUS, EXCESS MONEY CONTINUES TO COME INTO THE STATE WITH A $2.4 BILLION SURPLUS.

>> IT'S ALSO A GREAT DAY IN MINNESOTA BECAUSE WE HAVE A BALANCED BUDGET THIS BIENNIUM AND THE NEXT.

TODAY'S ECONOMIC FORECAST SHOWS THAT DEMOCRATS ARE GROWING THE ECONOMY IN MINNESOTA.

THE POLICIES THAT WE'VE ENACTED ARE SUPPORTING MINNESOTA'S WORKERS, REDUCING COSTS FOR FAMILIES, AND GROWING THE LABOR FORCE.

>> BUT A STRUCTURAL IMBALANCE IS PROJECTED YEARS OUT WITH INFLATION AGAIN FACTORED IN, ALONG WITH INCREASED SPENDING ON DISABILITY SERVICES AND EDUCATION COSTS FOR MORE ENGLISH LEARNERS AROUND FREE BREAKFAST FOR ALL, SOMETHING REPUBLICANS IMMEDIATELY LABELED A DEMOCRAT DEFICIT.

>> WHAT WE SEE TODAY IN THE FEBRUARY FORECAST IS A $10 BILLION DEFICIT.

I WILL SAY THAT AGAIN.

IT IS A DEFICIT.

NO MATTER WHAT THE SEMANTICS THAT WE'VE HEARD TODAY, NO MATTER HOW THEY SPIN THIS, THIS IS A DEFICIT.

>> SPENDING IS EXPECTED TO EXCEED REVENUES.

THAT'S A DEFICIT, MY FRIENDS.

>> REPUBLICANS SAY DEMOCRATS SQUANDERED THE OPPORTUNITY FOR BIG TAX CUTS AND NOW TAX REBATES ARE TAXABLE BY THE FEDERAL GOVERNMENT, NEWS THE GOVERNOR GREETED WITH CHOICE WORDS.

>> BULLSHIT.

IT'S THE IRS, I WILL TELL YOU THIS, I HAVE BEEN ON THE PHONE NOT MUCH MORE JUDICIOUS THAN THAT SLIP THERE.

TO LET THEM KNOW AND I SPOKE TO THE PRESIDENT'S CHIEF OF STAFF YESTERDAY WHEN THIS BECAME CLEAR, MINNESOTA IS BEING TREATED UNFAIRLY IN THIS.

>> I THINK IT'S GOING TO BE VERY RUSTRATING FOR MINNESOTANS.

THEY WERE EXPECTING A $2,000 REBATE CHECK AND THEY GOT $260 AND NOW ON TOP OF THAT, THEY'LL HAVE TO PAY FEDERAL TAXES.

MINNESOTANS ARE IN CREDIBILITILY FRUSTRATED AT HOW THE $17.5 BILLION SURPLUS WAS SQUANDERED AND THIS JUST ADDS INSULT TO INJURY.

>> Mary: DEMOCRATS AGAIN GET TO DECIDE WHAT TO DO WITH ANOTHER BUDGET SURPLUS WHILE THEY STILL HAVE COMPLETE CONTROL OF THE CAPITOL BEFORE HOUSE MEMBERS STAND FOR REELECTION NEXT YEAR.

>> AS WE LOOK FORWARD TO THE 2024 SESSION, OUR HIGHEST PRIORITY AND OUR FOCUS WILL BE THE BONDING BILL.

>> LET'S START BUILDING.

[Cheering] >> Mary: BUT AFTER BREAKING THE BILLION-DOLLAR BARRIER ON A BONDING BILL, IT NOW HAS TO BE SMALLER.

>> IF THEY SAY IT'S GOING TO TAKE ANOTHER 880 MILLION TO KEEP UP WITH INFLATION, I DON'T KNOW HOW, YOU KNOW, YOU CAN HAVE A BONDING BILL, YOU CAN KEEP UP WITH INFLATION, YOU CAN HAVE ALL THESE OTHER PROGRAMS SO I THINK WE'LL TO HAVE TAKE A SERIOUS LOOK AT THAT.

>> Mary: DESPITE TRYING TO AVOID THE WORD "DEFICIT" IN THE BUDGET FORECAST, THE NEW COMMISSIONERS COMMITTED IT WAS POSSIBLE.

>> IT'S POSSIBLE.

OVERALL, I WOULD CHARACTERIZE THE OUTLOOK AS MIXED.

>> CHILD CARE, WHOO.

>> THINGS LIKE A HALF A BILLION-DOLLAR CHANGE PROPOSAL FROM KEY LAWMAKERS LOOKS LESS LIKELY.

>> YOU'RE STILL HEARING THAT CHILD CARE IS A BIG ISSUE ACROSS THE STATE AND SO WE'LL AT LEAST HAVE THE DISCUSSION.

WE TOLD THEM, YOU KNOW, MAKE THAT BILL SCALABLE.

>> MINNESOTANS SEE A DEMOCRATSIC STATE LEGISLATURE AND A DEMOCRATIC GOVERNOR WHO VALUE THEIR CONTRIBUTIONS AS WORKERS, AND WHO HAVE ENACTED POLICIES TO ENSURE THAT THEY GET THE PAY, THE BENEFITS AND THE WORKING CONDITIONS THAT THEY DESERVE.

AND MINNESOTANS ARE RESPONDING TO THE DEMOCRATIC PRO-WORKER POLICIES BY CHOOSING TO WORK IN RECORD NUMBERS.

>> SINGLE-PARTY CONTROL, IN ONE YEAR THEY HAVE COMPLETELY EVISCERATED IT.

I AM INCREDIBLY DISAPPOINTED AT THE LANGUAGE THAT WAS USED TODAY TO HIDE THAT FROM YOU AS REPORTERS, BUT ALSO FROM MINNESOTANS, TRYING TO MASK WHAT'S ACTUALLY GOING ON IN THE STATE.

>> Mary: THE GOVERNOR SAYS HE'LL BE RESPONSIBLE, MEASURED AND BALANCED GOING FORWARD WITH THE LESSONS OF THE PAST.

>> WE'VE NAVIGATED THE MOST VOLATILE, ECONOMIC SITUATION SINCE THE GREAT DEPRESSION, AND WE'VE DONE SO BY BALANCING THE BUDGET WITH SURPLUS WHILE INVESTING HEAVILY IN THE MIDDLE CLASS AND