ST. PAUL (AP) — Minnesota budget officials projected a $1.332 billion surplus in the current two-year budget period on Thursday, setting up contentious debates for the 2020 legislative session on whether to save the extra money or spend it, possibly to cover tax cuts.

Budget Commissioner Myron Frans credited the surplus to a better-than-expected finish to the last budget period, a rosier revenue forecast and a modest decrease in estimated spending. He said the extra revenue will also boost the state’s separate budget reserve — a cushion against economic downturns — to $2.359 billion.

Democratic Gov. Tim Walz and Democratic legislative leaders joined Frans in urging a cautious approach to using the money, given that the forecast predicts slower economic growth over the next four years and that it doesn’t account for inflation in program costs. But they agreed that the forecast shows that the state can afford to pass a sizable public works borrowing package, also known as a bonding bill, during the session, which convenes Feb. 11.

Senate GOP Majority Leader Paul Gazelka said the surplus shows that the federal tax cuts enacted under President Donald Trump and the bipartisan state income tax cut approved by the Legislature earlier this year are spurring economic growth. He was pleased that the budget reserve has hit the target that lawmakers set.

“It’s time to give the rest back,” Gazelka said.