With Minnesota's projected budget surplus now estimated at more than $9.2 billion, lawmakers are looking at how that money can be best used.
Republicans insist the surplus is rock-solid proof that Minnesotans are overtaxed.
State Sen. Zach Duckworth (R-58) on Tuesday told WCCO's Vineeta Sawkar that permanent tax cuts are the way to go.
"We want to correct being overtaxed, but we don't want to overcorrect," he said.
Gov. Walz said it's not an issue of Minnesotans being overtaxed.
"What happened here is corporate profits are up and they paid their fair share at the end, and people spent more," said Walz, also on the WCCO Morning News.
The governor continued his support for rebate checks to all Minnesotans.
"We can get checks in the hands of people to reduce the cost we're seeing with inflationary pressures, we can also do some long-term tax cuts for folks, and we can invest to make sure that our education system is strong, roads, bridges, those types of things," he said.
Republicans says the idea of giving out checks is an election-year ploy by the governor.
"I get the governor's school of thought when it comes to trying to cut big checks to people, especially before an election cycle," said Duckworth.
The updated budget forecast on Monday came after the state projected a surplus of more than $7 billion in November.
"This is a good position to be in," said Walz. "And I think there's more agreement than there should be differences."