APPRECIATE THE CANDOR WITH WHICH OUR PANEL HAS APPROACHED IT.

WE HAVE A QUESTION FROM A VIEWER IN MORRISON COUNTY WHO WANTS TO KNOW ABOUT THE BUDGET SURPLUS AND IS SPECIFICALLY CONCERNED ABOUT WHETHER OR NOT WE ARE GOING TO BE HOLDING BACK ANY PART OF THE BUDGET SURPLUS OR RESERVE FOR FUTURE BUDGET ISSUES.

I DON'T THINK WE HAVE HAD A CHANCE TO START WITH YOU, SENATOR MATTHEWS.

LET'S GIVE YOU THE OPPORTUNITY TO STEP INTO THE BATTERS BOX ON THAT TO START SPRING TRAINING ANYWAY, TO START ON THAT ISSUE RIGHT NOW.

BUDGET SURPLUS, HOW MUCH?

WHERE IS THE MONEY COMING FROM?

THE FLOOR IS YOURS.

>> GREAT LEAD-IN AND TYING BACK TO WHAT I WAS JUST TALKING ABOUT.

WE ARE SITTING ON THE LARGEST SURPLUS THAT I HAVE EVER RECALLED AT $18 BILLION.

I THINK IT'S WISE TO KEEP A CHUNK, AND IF WE NEED TO INCREASE THE CHUNK THAT WE SAVE ON THE BOTTOM LINE FOR SOME FORM OF RAINY DAY FUND, EVEN IF WE MAKE THAT A LITTLE BIT BIGGER, THAT CAN BE A WISE PLANNING DOWN THE ROAD.

WE ARE LIKELY HAVING A TOUGHER ECONOMIC TIMES COMING AHEAD.

WE ARE STILL DEALING WITH RISING INFLATION, AND NUMBERS CAME OUT AGAIN TODAY THAT SHOWS IT'S GOING UP AND GAS PRICES ARE COMING DOWN A BIT, AND NOW GOING BACK UP AGAIN.

I WANT TO TRY TO HELP MINNESOTANS WITH MORE MONEY IN THEIR POCKETS, WITH PERMANENT ONGOING TAX RELIEF THAT'S MORE MONEY TO YOU AND I, WEEK AFTER WEEK, MONTH AFTER MONTH, YEAR AFTER YEAR, NOT A ONE-TIME PAYMENT THAT GOVERNOR WALZ IS STILL STUCK ON OF SPENDING DOWN SOME OF THE SURPLUS IN ONE-TIME SPENDING LIKE THAT, BUT REAL ACTUAL SAVINGS TO MINNESOTANS THAT CAN BE PERMANENT.

18 BILLION THAT WE ARE SITTING ON IS JUST PROOF WE ARE TAKING TOO MUCH FROM MINNESOTANS IN THE FIRST PLACE, AND IT'S TIME FOR GOVERNMENT TO MAKE SOME OF THE SAME DECISIONS THAT FAMILIES HAVE TO MAKE, LIKE I HAVE BEEN DOING IN MY FAMILY HERE RECENTLY, AND TIMES ARE GETTING TOUGHER AND YOU HAVE TO LOOK AT INCOME AND EXPENSES AND THINK WE MAY HAVE TO SHAVE THIS OFF OR NOT DO THIS ACTIVITY OR FIND WAYS TO CUT COSTS HERE, AND GOVERNMENT TRIES TO KEEP ITSELF IMMUNE FROM DOING THAT.

I THINK WE HAVE KEPT THE RESERVES AROUND, BILL AND A HALF, 2 BILLION, MAKING SURE THAT'S FULL, HAVING IT A LITTLE LARGER.

IF IT WERE UP TO ME, I WOULD HAVE A LARGE CHUNK OF THE SURPLUS GOING BACK TO YOU, THE TAXPAYERS OF MINNESOTA.

>> Barry: SENATOR FRENTZ.

>> I THINK SOME OF IT HAS GOT TO GO BACK TO THE TAXPAYERS, TOO, AND BY THE WAY, I'M NOT MARRIED TO THE IDEA OF THE REBATE CHECKS.

THE BOJT I CAN INCLUDES THE IDEA FOR SOME FAMILIES A CHECK OF $1,000 CAN BE QUITE HELPFUL AND THERE'S SOME LOGIC THAT SAYS IT WILL BE MOST HELPFUL TO THE FAMILIES THAT HAVE THE LEAST.

I GET THE LOGIC OF IT.

I JUST DON'T THINK YOU HAVE TO DO IT THAT WAY.

FOR CONTEXT FOR THE CALLER, WE HAVE 17.6 BILLION SURPLUS WITH ROUGHLY 6 BILLION IS SO-CALLED STRUCTURAL OR ONGOING.

THE OTHER 12 OR SO IS ONE TIME.

FOR PERMANENT TAX RELIEF, I WOULD SAY THAT HAS TO COME OUT OF THAT 6 BILLION.

BY THE WAY, I WOULD POINT OUT WE DON'T HAVE A PERMANENT SURPLUS.

SO PERMANENT TAX RELIEF RAISES THE QUESTION WHETHER DOWN THE LINE WE WOULD MOVE INTO THE DEFICIT.

PROBABLY THE ONE THAT GETS THE MOST DISCUSSION IN OUR CAUCUS IS THE SOCIAL SECURITY TAX RELIEF THAT SOME OF OUR DFL SENATE MEMBERS CAMPAIGNED ON, INCLUDING ME, FOR A FULL REPEAL.

I CAN SEE WE DON'T HAVE THE VOTES FOR A FULL REPEAL BUT HOPEFULLY REDUCTION IN SOCIAL SECURITY TAXES.

THANKFULLY I WOULD TRADE THAT FOR THE REBATE CHECKS, AND I THINK IT WOULD MAKE MORE SENSE AND SENDS A BETTER MESSAGE ABOUT PEOPLE STAYING HERE IN RETIREMENT.

THERE'S A LOT OF THINGS WE CAN TALK ABOUT, THE BUDGET, BUT SENATOR MATTHEWS MENTIONED THAT WE HAVE AN AUTOMATIC RESERVE AS TO THAT THE RESERVE WILL GO UP A LITTLE BIT HERE, AND I THINK THAT IS APPROPRIATE, LIKE A FAMILY THAT MAKES 50,000 A YEAR THAT HAS TO SAVE 2 OR 3,000 OF THAT A YEAR.

I THINK A LOT OF FAMILIES WOULD DO THAT IF THEY COULD.

>> Barry: REPRESENTATIVE SWEDZINSKI, THE QUESTION ABOUT RESERVES, TAXES AND WE WILL THROW IN THE SOCIAL SECURITY QUESTION.

I WILL GO BACK TO SENATOR MATTHEWS ON THAT TOO.

YOU FIRST.

TAXES, RESERVE, WHAT DO YOU HAVE 20 SAY ABOUT THAT.

>> THAT'S A BIG THING.

WE HAVE STRUCTURAL ACCOUNTS THAT WE PUT SOME DOLLARS IN.

WE HAVE A RAINY DAY ACCOUNT, CASH FLOW ACCOUNT SO THAT IF WE DO RUN INTO ISSUES WITH THE BUDGET THAT'S SET UP, WE DO ALREADY HAVE SOME OF THOSE ACCOUNTS THAT ARE SET UP.

MY GUESS IS THE QUESTION BY THE CALLER WOULD BE FOCUSING THOSE DOLLARS ABOVE AND BEYOND BUT ACTUALLY CASH IN THE CHECKBOOK, SO TO SPEAK, DOLLARS THAT ARE NOT NECESSARILY SPOKEN FOR.

I ABSOLUTELY AGREE.

THE GOVERNOR IN THE HOUSE AND SENATE WILL BE BASING THEIR BUDGET OFF THE FEBRUARY FORECAST, WHICH IS GOING TO BE COMING OUT IN A FEW DAYS, A WEEK, NOT EVEN SURE, BUT, YOU KNOW, THAT'S LIKELY FROM ALL INTENTS AND PURPOSES, SENATOR FRENTZ SAID THAT IT'S GOING TO BE -- CURRENTLY 17.6, AND I THINK MOST FOLKS AGREE IT'S LIKELY TO GO UP PAST THAT.

WE COULD SEE A SURPLUS IN THE 18 OR $19 BILLION.

WHEN GOVERNMENT IS FULL, THE LAST THING IS WE SHOULD BE FILLING IT UP MORE.

ONE OF MY BIG CONCERNS IS WHEN THE GOVERNOR RELEASED HIS BUDGET WITH THE PROGRAMMING AND THEY ARE LOOKING AT MULTIPLE BILLION DOLLARS TAX INCREASES, SO NOT ONLY DO WE HAVE A SURPLUS OF POTENTIALLY UP TO $20 BILLION THAT WE WILL BE DEALING WITH, BUT WE ARE ALSO SEEING THE MAJORITY OF GOVERNOR WALZ LOOKING AT INCREASING TAXES BY MULTIPLES OF BILLIONS OF DOLLARS, INCREASING GOVERNMENT, INCREASING PRESSURE, ESPECIALLY ON INDEPENDENT BUSINESSES, RAISING THE COSTS OF DOING BUSINESS AND THEIR COMPETITIVENESS AND REALLY PUTTING US AT POTENTIAL DISADVANTAGE AND AT A TIME WHEN JOBS ARE GOING TO BE SCARCE.

WE ARE SEEING LAY OFFS INCREASE ACROSS THE COUNTRY.

THOSE ARE ALL -- WHAT HAPPENS IN CALIFORNIA IN THE SUMMERTIME IS WHAT MAYBE HAPPENS HERE IN THE WINTER.

WHAT HAPPENS IN CALIFORNIA WINTERTIME MAY COME IN THE FALL OR THE SPRING.

SO I'M REALLY CONCERNED ABOUT WHAT THE OUTLOOK IS.

YOU ARE LOOKING AT A LOT OF THE GRAPH READERS IN WALL STREET.

THEY ARE REALLY CONCERNED ON IT.

WE ARE GOING TO SEE INFLATION COME DOWN.

THE REASON IT COULD START CREEPING DOWN, IT'S SO HIGH, AND IT'S BECAUSE OF MAJOR LAY OFFS AND PEOPLE ARE TAKING THEIR PERSONAL DEVELOPMENT.

IT'S TIME FOR STATE GOVERNMENT TO DO THE SAME.

>> SENATOR MATTHEWS, I WANT TO GIVE YOU A CHANCE TO TALK ABOUT THE SOCIAL SECURITY ISSUE THAT SENATOR FRENTZ RAISED.

AS A MATTER OF FACT, THAT'S A QUESTION ANOTHER VIEWER HAD.

SOCIAL SECURITY.

>> SOUNDS GOOD, APPRECIATE THAT.

IT WAS ONE OF THE TOP ISSUES THAT I HEARD OVER AND OVER AGAIN FOR OVER A YEAR AND ALL THROUGH LAST YEAR'S CAMPAIGN.

STILL GETTING ASKED ABOUT IT THIS YEAR.

GOING $18 BILLION SURPLUS, CAN YOU GET US A SOCIAL SECURITY FULL EXEMPTION FOR THAT.

IT'S IMPORTANT TO A LOT OF MINNESOTANS.

SENATOR FRENTZ, YOU KNOW, DEMOCRATS HAVE A 44-33 MAJORITY IN THE SENATE.

YOU PUT IT ON THE FLOOR NEXT MONDAY, IT WOULD PASS WITH LARGE BIPARTISAN SUPPORT.

YOU HAVE ALL 33 OF OUR MEMBERS, PLUS YOU AND BY MY COUNT THERE'S 5 OR 6 IN YOUR CAUCUS THAT HAVE BEEN VOCAL ABOUT THIS.

IT WOULD DEFINITELY PASS WITH BIPARTISAN SUPPORT.

I SUSPECT REPRESENTATIVE SWEDZINSKI COULD MAKE A SAME CLAIM IN HIS BODY, AND WE COULD HAVE IT ON THE GOVERNOR'S DESK NEXT WEEK, IF NOT FOR POLITICAL CHOICES MADE BY LEADERSHIP THAT ARE TRYING TO WEIGH OUT COMPETING FACTIONS IN THE MAJORITY CAUCUS.

WE ARE GIVING THEM OPPORTUNITIES, AND WE WILL GIVE FUTURE OPPORTUNITIES TO DO THE RIGHT THING.

THIS IS SUPPORTED BY A LARGE BROAD SPECTRUM OF MINNESOTANS AND BY A BROAD SPECTRUM IN THE LEGISLATURE, AND THERE SHOULD BE NO REASON WE DON'T GET IT DONE