>> ERIC: WE'RE GOING TO END TONIGHT'S SHOW WITH, WHAT ELSE...

POLITICS!

ALL FOUR LEGISLATIVE LEADERS ARE HERE WITH US.

DFL SENATE MAJORITY LEADER ERIN MURPHY HOLDS THE LONGEST TENURE AS AN "ALMANAC" GUEST.

SHE FIRST APPEARED ON THE COUCH BACK IN 2004 AS A MEMBER OF OUR POLITICAL PANEL.

REPUBLICAN SENATE MINORITY LEADER MARK JOHNSON MADE HIS FIRST LIVE APPEARANCE ON THE SHOW VIA ZOOM IN 2022.

HOUSE LEADERS WITH US TONIGHT, DFL SPEAKER DESIGNATE MELISSA HORTMAN FIRST JOINED US IN 2008 AND ROUNDING OUT THE PANEL.

REPUBLICAN SPEAKER DESIGNATE LISA DEMUTH'S FIRST FRIDAY NIGHT APPEARANCE WAS A 2022 TAPED VISIT TO THE HOUSE FLOOR SHORTLY AFTER SHE WAS ELECTED TO LEAD HER CAUCUS.

WELCOME BACK, ALL OF YOU.

THANKS FOR COMING.

YOU'VE ALREADY -- YOU HAD SOME -- IT'S 67-67 IN THE HOUSE AND AFTER THE REVENUE FORECAST THAT SHOWED A SMALL SURPLUS GOING FORWARD, AND THEN DEEPER WATER IN THE YEARS TO COME, YOU'VE ALREADY GOTTEN SOME ORDERS TO GET DATA FROM STATE AGENCIES AND HOW SPECIFIC ARE YOU GETTING HERE?

>> WE'RE GOING TO BE VERY SPECIFIC WHEN WE GO AHEAD AND TALK WITH THOSE COMMISSIONERS AND THE AGENCIES, THE FACT THAT WE ARE TIED 67-67 MEANS THAT WE'LL HAVE CO-CHAIRS AND THE REPUBLICAN HOUSE CO-CHAIRS WANT TO HAVE THE AGENCIES COME IN AND TALK ABOUT THE NUMBER OF FULL-TIME EQUIVALENT EMPLOYEES, SO FTEs, HOW MANY ARE FILLED, HOW MANY RE NEW, HOW MANY ARE YET TO BE FILLED, THE NUMBER OF PEOPLE THAT ARE WORKING FROM HOME OR MAYBE IN THE OFFICE, HOW THEY'RE GOING TO COMBAT FRAUD AND HOW THEY CAN POSSIBLY COME UP WITH SOME SAVINGS IN THEIR AGENCIES.

>> Eric: DID THE FORECAST CHANGE HOW YOU SEE A SHARED GOVERNANCE IN THE HOUSE OR IS IT STILL FULL SPEED AHEAD WITH WHATEVER PLAN YOU GOT COOKING?

>> O, I THINK IT'S GOING TO BE A VERY BIPARTISAN SESSION.

OBVIOUSLY 67-67, SHARED POWER, MEANS SHARED AND I THINK EVERYTHING THAT WE'VE DONE SO FAR IN NEGOTIATIONS WITH LEAD US TO 50% OF POWER FOR EACH ENTITY.

I'M VERY PRUDE WE ENDED THE CURRENT BIENNIUM WITH A $3.7 BILLION SURPLUS.

THE EXT BIENNIUM HAS A $616 MILLION SURPLUS AND WHEN WE LOOK OUT IN THE OUT YEARS, THERE ARE SOME REASONS TO BE CONCERNED.

THE ECONOMIC FORECASTERS AVE CHANGED SOME OF THEIR MODELING AND SO, CERTAINLY, THIS YEAR, WE SHOULD GET READY FOR THAT LONG TERM.

>> Eric: HOW MUCH DEPENDS ON THE FEDERAL, WHATEVER FEDERAL ACTION THERE IS?

>> WELL, RIGHT NOW WE CAN'T REALLY CONTROL THAT.

WE DON'T KNOW WHAT'S GOING TO BE COMING DOWN THE PIPE FROM THE FEDERAL ADMINISTRATION BUT, YOU KNOW, WHAT WE CAN CONTROL IS WHAT HAPPENS HERE IN THE STATE OF MINNESOTA AND SO WE'RE REALLY GOING TO BE FOCUSED ON THAT AND DOING WHAT MINNESOTANS SENT US HERE TO DO ND THAT'S TO HAVE SOME BIPARTISAN BUDGETING GOING FORWARD THIS NEXT SESSION.

>> Cathy: YOU KNOW, THOSE OUT-YEARS DON'T LOOK THAT GREAT AND THERE WILL BE SOME FOLKS THAT MIGHT LOOK AT THAT AND SAY, DID Y'ALL KIND OF FIGURE THAT MIGHT HAPPEN, WHEN YOU WERE MAKING YOUR DECISIONS DURING THE BIG SESSION OF '23?

>> YOU KNOW, SPEAKER HORTMAN MENTIONED THIS, LIKE, THE FISCAL STATE IS STRONG IN MINNESOTA.

THE RESERVES, THE CARRY-FORWARD AND THE SURPLUS IN THE BUDGET THAT WE HAVE TO BALANCE IS STRONG.

BUT THERE'S A STORY BEHIND WHAT WE'RE SEEING IN THE OUT-YEARS AND IT'S A HUMAN STORY, AND IT IS THE INVESTMENT THAT WE HAVE MADE IN MAKING SURE OUR KIDS WITH SPECIAL EDUCATION NEEDS AND ADULTS WITH DISABILITIES ARE GETTING THE CARE THAT THEY NEED AND THE PEOPLE DOING THAT WORK ARE BEING WELL PAID.

I THINK THERE IS A VALUES QUESTION EMBEDDED IN THAT AND WHILE WE THINK ABOUT WHAT WE HAVE TO DO IN TERMS OF THE BUDGET AND THE NUMBERS, WE CAN'T TAKE OUR EYE OFF THE VALUES OF MINNESOTANS TO MAKE SURE THAT WE'RE DOING RIGHT BY THE PEOPLE.

>> Eric: TAX INCREASES OFF THE TABLE?

>> TAX INCREASES ARE DEFINITELY OFF THE TABLE.

WE JUST EXPERIENCED A 38% INCREASE IN OUR STATE BUDGET, THAT'S TAXES AND FEES ON EVERY MINNESOTAN.

THOSE ARE OFF THE TABLE FOR SURE.

>> Eric: WHAT ARE YOU THINKING ABOUT AS YOU'RE PART OF THE DESIGNATION?

>> I THINK THEY'RE VERY UNLIKELY.

>> Eric: THEN CUTS ARE GOING TO HAVE TO HAPPEN IN EDUCATION AND HUMAN SERVICES ARE TOUGH TO CUT.

>> WELL, ONE OF THE THINGS THAT WHEN WE'RE TALKING ABOUT STORIES AND THE STORY BEING TOLD IS ALSO THE FRAUD THAT HAS GONE ON IN THIS STATE SO MAKING SURE THAT WE'RE TAKING CARE OF THE DOLLARS THAT MINNESOTANS ARE ENTRUSTING TO THE MINNESOTA STATE GOVERNMENT.

AND THAT'S GOING TO BE A BIG FOCUS AND MAKING SURE THAT WE'RE HOLDING PEOPLE ACCOUNTABLE FOR THAT.

>> Cathy: WHAT DOES IT LOOK LIKE, EXACTLY?

OBVIOUSLY, FEEDING OUR FUTURE IS THE ONE STORY BUT THERE'S BEEN OTHERS, OBVIOUSLY.

>> IF YOU LOOK, WHO'S BEEN HELD ACCOUNTABLE FOR THAT IN MINNESOTA STATE GOVERNMENT?

NOBODY HAS LOST THEIR JOB, NOBODY HAS GONE AWAY TO PRISON, THERE'S BEEN NOTHING LIKE THAT AND WE'VE LIST ALMOST A BILLION DOLLARS OF TAXPAYER DOLLARS DOING THAT.

SO WE HAVE TO DOUBLE DOWN AND FIGURE OUT HOW THAT LOOKS LIKE, HOW DO WE ADDRESS THAT GOING FORWARD.

>> BIG THANKS TO ANDY LUGER FOR PURSUING THAT AND MAKING SURE THEY'VE GONE TO JAIL.

>> Eric: U.S. ATTORNEY.

>> THAT'S RIGHT.

BUT IN THE '23 LEGISLATURE, THE DEMOCRATS BOTH IN THE HOUSE AND SENATE MADE SURE THAT WE PUT IN PLACE POLICIES, I WAS THE AUTHOR OF THE LEGISLATION, THAT GAVE US NEW TOOLS IN THE LEGISLATURE AND THE ADMINISTRATION TO ROOT OUT AND PREVENT FRAUD.

THOSE THINGS ARE IN PLACE, SO WE WELCOME YOUR CONTINUED WORK ON THAT.

>> Eric: WHEN WILL YOU HAVE A PLAN TO GO FORWARD IN THE HOUSE?

IS IT GOING TO BE JANUARY 13th, THE NIGHT BEFORE YOU CONVENE OR -- WHAT ARE OUR PROSPECTS, WHAT SHOULD WE EXPECT IN THE NEXT FEW WEEKS?

>> I THINK WE WORKED TOGETHER EARLY ON WHERE WE CAME UP WITH OUR COMMITTEES AND NAMED CO-CHAIRS.

WE'RE PUTTING SOMETHING OUR COMMITTEE ASSIGNMENTS FOR ALL THE MEMBERS.

THE REST OF THE POWER SHARING THAT WE NEED TO DO WILL CONTINUE BUT RIGHT NOW WE'RE ON HOLD.

WE POTENTIALLY HAVE TWO SPECIAL ELECTIONS, ONE IN ROSEVILLE, ONE IN SCOTT COUNTY, WITH 20 MISSING BALLOTS.

WE ONLY NEED A POWER SHARING AGREEMENT IF THERE'S TRULY A TIE AND SO THAT'S WHAT WE ARE WAITING ON.

>> Eric: WHAT ARE YOU THINKING?

>> REPUBLICANS WON'T BE ABLE TO WIN IN THE COURTS IN PLACES WHERE THEY WEREN'T ABLE TO WIN IN THE ELECTION.

CURTIS JOHNSON LIVES IN 40B AND THE COURT WILL CONCLUDE THAT.

BRAD TABKE WON IN THE DISTRICT HE REPRESENTS, I THINK 54A AND THE COURTS WILL ALSO CONCLUDE THAT.

>> BUT THIS WILL PROBABLY ENDS UP IN COURT, DON'T YOU THINK?

>> IT'S IN COURT RIGHT NOW.

ABSOLUTELY.

>> Cathy: ABSOLUTELY AND COULD PROBABLY LAST MAYBE A LITTLE WHILE?

>> ELECTION CONTESTS HAVE TO BE HEARD WITHIN 15 DAYS OF BEING FILED SO I EXPECT THAT BOTH OF THOSE CASES WILL BE RESOLVED BEFORE CHRISTMAS.

>> Eric: OW MUCH LAW-MAKING CAN GET DONE BESIDES THE BARE-BONES BUDGET STUFF?

I'M THINKING OF SPORTS GAMBLING AND THERE'S A MILLION OTHER ISSUES THAT WOULD NOT BE BUDGETARY, NECESSARILY, BUT -- OR IS IT JUST NOT EXPECT VERY MUCH?

>> I KNOW THAT WE ARE ALL, YOU KNOW, FASCINATED WITH THIS MOMENT OF A TIE AND A CLOSELY DIVIDED SENATE AND WE OFTEN TALK ABOUT MINNESOTANS BEING VERY DIVIDED.

WICKED LOOK AT THIS AND SAY WE'RE NOT ALL THAT DIVIDED, AT ALL.

THE WILL TO WORK TOGETHER IS THE ANSWER TO THIS QUESTION AND IF WE ARE WILLING TO WORK TOGETHER TO MAKE A BUDGET BALANCE, TO SERVE THE PEOPLE OF MINNESOTA AND ADVANCE POLICY, THERE'S NOT A SINGLE REASON IN THE WORLD WE CAN'T DO THAT.

IN MY CAUCUS, I'M SO PROUD TO BE THE MAJORITY LEADER, MY CAUCUS IS READY TO DO THAT WORK.

>> Eric: YOU SHARE THAT OPTIMISM?

>> WE CAN TAKE THE OPPORTUNITY TO BALANCE A BUDGET AND THEN MOVE FORWARD.

>> ABSOLUTELY.

THIS IS A REALLY HISTORIC OPPORTUNITY TO GET BALANCED LEGISLATION GOING FORWARD THAT WE HAVEN'T SEEN OVER THE LAST TWO YEARS O I'M EXCITED ABOUT THIS SESSION, ERIC.

>> LOTS OF GOOD THINGS HAPPENED IN DIVIDED GOVERNMENT BETWEEN '19 AND 2022 AND A LOT OF TEPS FORWARD ON THE OPIOID EPIDEMIC AND OTHER LEGISLATION SO I THINK THAT WILL CONTINUE.

>> Cathy: WE'LL SEE YOU OBVIOUSLY SESSION STARTS -- >> JANUARY 14th.

>> Cathy: THE 14th.

ALL RIGHT.

IN THE MEANTIME, WE WISH YOU ALL HAPPY HOLIDAYS.

>> Eric: THANKS VERY MUCH FOR COMING.