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What should the state do with its historic $7.7 billion projected surplus? Here's what the governor and legislative leaders told us.

DFL Gov. Tim Walz: The governor said he wants to use part of the surplus to tackle rising costs and lack of child care, as well as to set up a paid family and medical leave program and a public option on the state's health insurance marketplace. Agreeing with the GOP, Walz wants to fully replenish the state's unemployment insurance trust fund and is proposing spending $700 million in one-time "Walz Checks" sent directly to roughly 2.7 million households. The checks would give payments of $175 to single tax filers earning up to $164,400 and $350 to married couples who file jointly and make $273,470 or less. He's also proposing relief for energy and gas bills this winter.

House Speaker Melissa Hortman, DFL-Brooklyn Park.
House Speaker Melissa Hortman, DFL-Brooklyn Park.

Glen Stubbe, Star Tribune file

DFL House Speaker Melissa Hortman: She suggested spending another $750 million on frontline worker bonuses and nearly $1.7 billion for two years of a paid family leave program. She also wants tax cuts for middle- and lower-income Minnesotans. Hortman suggested spending "significant resources" on students and teachers, from early childhood education through job training and college. And Hortman pointed to a $100 million law enforcement proposal that supports "best practices" and nonprofits doing violence prevention.

Senate Majority Leader Jeremy Miller, R-Winona.
Senate Majority Leader Jeremy Miller, R-Winona.

Anthony Souffle, Star Tribune file

GOP Senate Majority Leader Jeremy Miller: Miller said the Senate GOP will propose a "very large tax relief package" this session. Legislators need to eliminate the deficit in the state's unemployment insurance trust fund, and then they can do more to lower unemployment insurance tax rates for small businesses, he said. Miller's caucus is working on plans to recruit and retain police officers. He added that the Senate GOP will work on improving literacy as part of its focus on education.

House Minority Leader Kurt Daudt, R-Crown.
House Minority Leader Kurt Daudt, R-Crown.

Glen Stubbe, Star Tribune file

GOP House Minority Leader Kurt Daudt: He wants Minnesota to bring back its reinsurance program to help control rising health care costs, and he suggested educational tax credits to solve the achievement gap. Daudt said the state should take care of its federal debt for helping cover shortfalls in the unemployment insurance trust fund. He called for ending the Social Security tax "once and for all" and a "moratorium" on energy taxes. He said some of the surplus should go toward boosting law enforcement budgets and recruiting new officers.

Senate Minority Leader Melisa López Franzen, DFL-Edina.
Senate Minority Leader Melisa López Franzen, DFL-Edina.

Glen Stubbe, Star Tribune file

DFL Senate Minority Leader Melisa López Franzen: She said more money is needed to support health care workers and personal care assistants, and to address the workforce shortage in those areas. López Franzen also suggested increased spending on teachers, child care and workforce training. She added that legislators should put dollars toward recruiting and retaining law enforcement, and supporting mental and chemical health and youth intervention programs. She also suggested grants for car theft prevention and bonus pay to attract more officers to the law enforcement profession.

Staff writers Briana Bierschbach and Jessie Van Berkel contributed to this report.