Minnesota Gov. Tim Walz on Thursday pledged that child care access will be a "fundamental priority" in the upcoming legislative session, stressing its importance for the state's economic growth.

The DFL governor said Minnesota's multibillion-dollar budget surplus presents a rare opportunity to expand child care availability and increase affordability. Walz announced new funding to grow the state's child care supply and mulled further actions during a roundtable discussion with state and nonprofit leaders on Thursday.

"You've got our commitment from our administration ... We're at a very unique and opportune time to be able to address this," Walz said during the discussion at Comunidades Latinas Unidas En Servicio (CLUES) in St. Paul. "This issue of child care is foundational to our economic growth."

Walz's spending ambitions will have a receptive audience at the State Capitol over the next two years with Democrats now controlling both the House and Senate. He said Democrats leading those chambers also view child care as a top priority.

State lawmakers return to the Capitol in January.

Department of Employment and Economic Development (DEED) Commissioner Steve Grove estimated that Minnesota needs 80,000 to 90,000 more child care slots to meet demand.

Walz and Grove announced Thursday that DEED awarded about $2.4 million in child care funding grants to 17 organizations across the state. That funding will help add about 2,700 new child care slots, Grove said.

Over the past five years, DEED has allocated more than $4 million to organizations seeking to expand access to affordable child care. The funding is expected to create nearly 9,500 new child care slots.

"Child care comes up again and again as the number one thing that's holding back people from getting into the workforce," Grove said.

In Greater Minnesota, employers desperate for workers have had job offers rejected by applicants who can't find housing or child care, said Scott McMahon, executive director of the Greater Minnesota Partnership.

About 43,000 more child care slots are needed in Greater Minnesota, McMahon said.

State Human Services Commissioner Jodi Harpstead said the number of licensed child care centers in Minnesota has increased slightly year over year. But family child care providers have been declining amid retirements and people switching to more profitable, less demanding careers.

More funding is needed to open new child care businesses and expand existing ones, Harpstead said. The state should also consider wage subsidies to help child care centers retain employees, she said.

"We need new and creative approaches," Harpstead said.