FAIRMONT — The Minnesota Legislature will go into its 2020 legislative session with a nice problem to have: how to utilize a projected $1.5 billion budget surplus.

State Rep. Bob Gunther, R-Fairmont, hopes the situation translates into tax relief for Minnesotans, but he anticipates some difficulty in achieving that goal. This is because Democrats control the House of Representatives and the governor’s office, while Republicans are in charge in the Senate.

Some of the surplus will automatically be shifted into the state’s “rainy day” fund, giving Minnesota about $2.5 billion in reserves to offset any future economic downturn. But the rest of the money will be up for grabs, and lawmakers are not short on ideas of what to do with it.

Gunther, for his part, sees value in tax cuts.

“We should give it back to the people,” he said.

He sees lowering taxes overall as the fairest idea, but would not mind a targeted solution.

“There’s certain taxes that we have that shouldn’t be there; one of them is on Social Security checks for senior citizens,” he said. “Another one is the ‘sick tax,’ when we tax [health services]. We’re the third- or fourth-highest taxed state in the nation.”

He also believes the statewide business property tax — something only businesses pay — and the estate tax are onerous, harming the state’s business environment or placing burdens on those who would like to hand down property, such as farms.

State Sen. Julie Rosen, R-Vernon Center, also weighed in recently on the projected surplus, saying it helps secure future state budgets. However, she argues that state agencies are spending money with less accountability than ever.

“I’m expecting the [stage agency] commissioners to do a deep dive into their budget and account for every penny before they come to the [Senate] finance committee asking for more funding,” said Rosen, who chairs the committee.

Gunther notes that Democrats have their own priorities. He says these are likely to include utilizing the surplus as additional bonding money for public works projects around the state.

Utilizing a traditional formula, Gunther says this year’s bonding bill — the focus of even-year sessions — should be about $1.7 billion. But he believes Democrats will push to spend closer to $3 billion, given the extra cash on hand.

With divided government, neither side is likely to get its way.

“I think [Gov. Tim Walz] learned in his first two years that the Senate is controlled by Republicans and they can stop anything that he wants to do, so there has to be compromise to get the things he wants to do … and to get the things we want,” Gunther said.

The nature of that compromise is unknown at this point. The session begins Feb. 11 and ends May 23.

Gunther noted that two Fairmont projects already are in the House bonding bill: $20 million for a new Martin County jail and $400,000 for the Martin County Veterans Memorial. Gunther says he is optimistic that those outlays will be approved by the Legislature in the end.

While the surplus will be the focus for lawmakers, they are not prohibited from tackling other issues, even though they set their two-year budget in 2019. Gunther would like to see his colleagues do more to help foster better business conditions in the state.

He said the federal government has daycare money available, if there are sponsoring businesses. Utilizing federal and state dollars, and throwing in funds added by businesses, may help alleviate the daycare shortage in Minnesota. Such an effort could help businesses fill jobs currently going unfilled. Gunther said there currently are only 5.2 people available in the state to fill every 10 open jobs. More affordable daycare would help more people enter the workforce.

Along the same lines as the daycare issue, affordable workforce housing remains a problem that needs to be addressed, Gunther said.

Finally, Gunther expects the Minnesota Department of Human Services to be in the spotlight during the session, given several high-profile scandals involving misappropriated funds.

“They say it’s between 6,900 and 7,200 people work for that department and they think they’re going to break it up into about six different units,” he said. “They will potentially get that done [this session]. And I think the governor likes that idea.”