>> ERIC: THE STATE'S FINANCES ARE A MIXED BAG, BUDGET FORECASTERS PREDICT A SURPLUS FOLLOWED BY A SHORTFALL.

POLITICAL REPORTER MARY LAHAMMER ALSO ASKS HOW FRAUD CAN BE ACCOUNTED FOR AS THE VOLATILE ISSUE GAINED NATIONAL ATTENTION.

>> Mary: THE UDGET FORECAST SHOWS A MORE THAN $2 BILLION SURPLUS, BUT GOING FORWARD, A SHORTFALL OF MANY MORE BILLIONS IS ESTIMATED.

THE U.S.

ATTORNEY HAS REFERENCED NEARLY A BILLION DOLLARS OF FRAUD IN GOVERNMENT PROGRAMS.

LAWMAKERS HAVE ESTIMATED THE NUMBER OF AT LEAST A BILLION.

HAVE YOU ASKED FOR THAT NUMBER?

AND DO YOU HAVE ANY SENSE HOW MUCH IT MIGHT BE IN THE SURPLUS?

>> I DON'T KNOW WHERE THEY'RE GETTING THAT NUMBER.

SO THEY'RE -- >> Mary: IS IT A FAIR NUMBER, WHAT DO YOU THINK OF THE NUMBER?

>> I THINK IT CERTAINLY COULD BE, WE DON'T KNOW ON THIS.

IT'S ONE THING, AS I HEAR FROM LEGISLATORS, AS EVERYONE IN THIS ROOM KNOWS, THE PRESS KNOWS, THERE'S NO DATA PRACTICES THEY'RE COMING FROM SO YOU CAN ASK WHATEVER.

>> Mary: WE DID HEAR FROM GOVERNMENT OFFICIALS, IT'S IN THERE.

>> THE AUDITS ARE NOT DONE YET, THEY'RE HAPPENING.

THEY'RE DOING THESE OUTSIDE OF THIS, THESE ARE INDEPENDENT FOLKS, NOT IN STATE GOVERNMENT THAT ARE DOING THAT.

WHEN THAT COMES BACK, WE WILL KNOW.

>> Mary: HOW DO YOU ACCOUNT FOR THE FRAUD THAT'S NOT ACCOUNTED FOR?

>> SO SOME OF THE OTHER THINGS , THAT'S A REALLY GOOD POINT THAT WE DON'T HAVE THE TOTAL NUMBERS IN.

THE THINGS WE COULDN'T GET OVER THE FINISH LINE WAS THE INDEPENDENT OFFICE OF INSPECTOR GENERAL.

HOUSE DEMOCRATS BLOCKED THAT AND WOULD NOT LET IT THROUGH.

THAT IS ONE OF THE TOP THINGS THAT WE WILL LOOK AT DOING.

>> Mary: SPEAKER DEMUTH IS ONE OF A DOZEN REPUBLICANS RUNNING AGAINST GOVERNOR WALZ, SO THE POLITICS OF SESSION AHEAD COULD BE COMPLICATED.

>> BILLIONS IN TAX INCREASES THAT WERE IMPLEMENTED BY THE TRIFECTA AREN'T NOUGH TO KEEP UP WITH THE OUT-OF-CONTROL SPENDING AND FRAUD.

>> Mary: BUDGET FORECASTERS SAY THEY COULDN'T CALCULATE FRAUD IN THIS FORECAST BUT IT SHOWS UP WITH SPENDING IN HIGHER HEALTHCARE COSTS, ALONG WITH SLOW ECONOMIC GROWTH.

>> FURTHER, LOW-GROWTH ECONOMY CAN MORE EASILY SLIP INTO RECESSION.

>> YOU SEE THE IMPACTS OF TARIFFS, YOU SEE THE IMPACT OF SOME IS OF THE -- SOME OF THE IMPACTS ON HEALTHCARE, ON MEDICAID SPENDING.

>> THERE'S A REASON THAT THIS PRESIDENT SAYS HATEFUL, OUTRAGEOUS THINGS, CREATING SOME NEW CRISIS EVERY AY, IT'S BECAUSE HE'S SCARED AND IT'S BECAUSE HE'S WEAK.

HE'S AFRAID IN THE KNOWLEDGE THAT THE AMERICAN PEOPLE ARE LEARNING MORE EVERY DAY ABOUT THE GREAT GRIFT, REALLY, A THEFT, THE LARGEST TRANSFER OF WEALTH FROM THE POOR TO THE RICH.

OF >> THE BIGGEST SINGLE TAKEAWAY FROM THIS BUDGET FORECAST IS THAT THE SAME HEALTHCARE COST INCREASES HAT ARE HITTING FAMILY BUDGETS ACROSS MINNESOTA ARE NOW IMPACTING THE STATE BUDGET.

>> THE PRESIDENT HAS CREATED CHAOS IN OUR ECONOMY.

>> Mary: WALZ IS OW BRACING FOR THE START OF ANOTHER BIG GOVERNMENT PROGRAM TO CREATE PAID FAMILY LEAVE, HE SAYS IT WILL HAVE SAFEGUARDS AGAINST FRAUD.

>> MY MESSAGE IS SIMPLE ON THIS.

YOU COMMIT FRAUD IN MINNESOTA, YOU'RE GOING TO PRISON.

I DON'T CARE WHAT COLOR YOU ARE, WHAT RELIGION YOU ARE.

ANYBODY WHO WANTS TO HELP US IN THAT, WE WELCOME THAT.

BUT SETTING ON THE SIDELINES AND THROWING OUT ACCUSATIONS, AND LET'S BE VERY CLEAR, DEMONIZING AN ENTIRE POPULATION AND LYING TO PEOPLE ABOUT THE SAFETY AND SECURITY OF THIS STATE IS BENEATH THAT.

>> BECAUSE OF THIS PAID FAMILY LEAVE, I'M GOING TO BE LOOKING FORWARD TO SOME TIME WITH HER THAT I OTHERWISE WEREN'T WOULDN'T BE ABLE TO SPEND.

>> Mary: THE GOVERNOR AS A HIGH-PROFILE FORMER VICE PRESIDENTIAL CANDIDATE HAD TO DEFEND HIMSELF FROM ATTACKS FROM THE PRESIDENT AND NEW SCRUTINY FROM THE NATIONAL MEDIA, OVER FRAUD HERE.

>> DO YOU TAKE RESPONSIBILITY FOR FAILING TO STOP THIS FRAUD IN YOUR STATE?

>> CERTAINLY.

I TAKE RESPONSIBILITY FOR PUTTING PEOPLE IN JAIL.

GOVERNORS DON'T GET TO JUST TALK THEORETICALLY.

WE HAVE TO SOLVE PROBLEMS.

AND I WILL NOTE, IT'S NOT JUST SOMALIS.

MINNESOTA IS A GENEROUS STATE.

MINNESOTA'S A PROSPEROUS STATE.

BUT THAT ATTRACTS CRIMINALS.

THOSE PEOPLE ARE GOING TO JAIL.

>> WALZ IS A GROSSLY INCOMPETENT MAN.

THERE'S SOMETHING WRONG WITH HIM.

WHEN I WATCH WHAT IS HAPPENING IN MINNESOTA, AND I SEE THESE PEOPLE RIPPING IT OFF, AND NOW I'M UNDERSTANDING AND YOU'RE GOING TO LOOK INTO THIS, I HEAR THEY RIPPED OFF SOMALIANS, RIPPED OFF THAT STATE FOR BILLIONS OF DOLLARS.

>> Mary: IMMIGRATION ACTION IN MINNESOTA IS BRINGING UNCERTAINTY AND FEAR AFTER MEMBERS OF THE SOMALI COMMUNITY WERE TARGETED FOLLOWING THE ATTENTION TO CONNECTIONS TO FRAUD.

>> DEPORTED TO GOD KNOWS WHERE!

I.C.E.

AGENTS WOULD DISEMBARK FROM THE AIRPLANE AND UNLOAD BAGS OF SHACKLES FROM THE CARGO HOLD.

>> DEFEND THE DIGNITY AND THE HUMANITY OF ALL OUR IMMIGRANT COMMUNITIES.

[ Cheers ] >> THAT'S RIGHT!

[ Cheers ] >> WHEN OUR NEIGHBORS, WHEN OUR FAMILIES ARE IN THE TIME OF DANGER, WHAT DO WE DO?

WE DO NOT STOP PRAYING.

>> THERE ARE AS MANY AS 100 FEDERAL AGENTS THAT WILL BE DEPLOYED TO THE TWIN CITIES WITH A SPECIFIC FOCUS ON TARGETING OUR SOMALI COMMUNITY.

TO OUR SOMALI COMMUNITY, WE LOVE YOU, AND WE STAND WITH YOU.

>> OUR PRESIDENT IS RACIST, XENOPHOBIC, ISLAMOPHOBIC, AND WE ARE GONNA FIGHT THAT.

>> THE FEAR THAT THE COMMUNITY HAS BEEN EXPERIENCING, IMMIGRANT COMMUNITIES HAVE BEEN EXPERIENCING IN THIS CITY IS REAL.

I HAVE BEEN MEETING WITH