By Esme Murphy

ST. PAUL, Minn. (WCCO) — Today, the state of Minnesota announced a surplus of $1.3 billion. Now, the debate over what to do with the money is already in high gear.

Minnesota has a projected $1.3 billion surplus and for the time has reached its goal of $2.3 billion  in its rainy day fund — a fact celebrated in a cheery handout saying, “Congrats Minnesota.”

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State leaders say a healthy rainy day fund means Minnesota will not experience drastic budget cuts in another recession.

“We were not prepared for the last recession but with our sound fiscal management, we have learned from our mistakes and are better prepared for the next one,” Myron Franz, Minnesota Management and Budget Commissioner reports.

But what to do with the surplus?

Governor Tim Walz who has long pushed for infrastructure and transportation funding says that’s where some of the money should go.

“It is fiscally irresponsible to allow our infrastructure, whether that be water infrastructure, states higher education infrastructure, in our communities, roads and bridges, transit — those are the things that are the building blocks that lead to strong economic growth and opportunities for Minnesotans,” Walz said.

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But Republicans have a different view.

“It’s time to give the rest back,” Republican Senate Majority Leader Paul Gazelka said.

Gazelka is calling for tax cuts. He said Minnesota should no longer be one of just 13 states that taxes social security benefits.

“That would be a real win for Minnesota,” Gazelka added.

Republican House Minority Leader Kurt Daudt wants the repeal of a 1.8% medical provider tax that the legislature has allowed to stand.

“I think this allows us an opportunity to correct a wrong,” Daudt said.

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Governor Tim Walz did say he would be open to tax cuts. But we can expect a lot of debate on what to do with the surplus when Session 2020 gets underway in February.

Esme Murphy