That rarest of political events - compromise - blossomed this year in the Minnesota Legislature, and it will bear fruit for this area.

Here are some examples:

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The first new tax bill in five years was approved by the Republican-led Senate and the DFL-led House, and is expected to be signed by DFL Gov. Tim Walz.

Local impact

The new bill will prevent $92,000 in Local Government Aid cuts to Detroit Lakes, keeping it at $632,000 for another year, and it will raise Frazee's LGA payment from the state to $521,000 from $498,000 now, according to Rep. Paul Marquart of Dilworth, who chairs the House Taxes Committee.

"Detroit Lakes would have lost $92,000 because of the (LGA) formula, but I put in the bill that no city could be less than the year before," Marquart said in an interview. About two-thirds of state LGA goes to greater Minnesota, he noted.

County aid to Becker County will rise by about $90,000, to $1.29 million, a 7.6 percent hike, he said.

The Legislature approved the local option sales tax for Detroit Lakes, which will raise $6.7 million for a new law enforcement center. Detroit Lakes Police Chief Steven Todd "worked really hard on it, I give him a lot of credit," Marquart said. "He came down here (to the Capitol) and testified on it."

A break for farmers, a lift for schools

Farmers will also get a break, since property taxes on agricultural land raised from school bond levies will be capped at 70 percent, via step increases over five years.

Currently, ag land gets a 40 percent break on school bond taxes, and that will increase to a 50 percent credit, then 55 percent, then 60 percent, until it reaches a 70 percent credit in 2023, Marquart said.

"It's one of the big reasons that rural school district referendums fail," he said. "Farmers might have 2 percent of the vote, but make 60, 70, 80 percent of the payments." In the Barnesville school district, for example, it's 74 percent, he said. "It just isn't fair."

Speaking of education, the Legislature increased per-pupil payments to school districts by 2 percent a year for the next two years. In Detroit Lakes, that amounts to an additional $176 per pupil unit for the next two years. In Frazee-Vergas, it will mean an additional $186 per pupil unit for the next two years, according to numbers from the nonpartisan Minnesota House Research.

Tax conformity at last

As for the Tax Bill, everybody who pays state income tax will notice that Minnesota acted to conform with the 2017 federal tax changes. "We doubled the standard deduction," Marquart said. "It's now $13,300 for a married couple, that will go to $24,400," matching the federal standard deduction. "It will really simplify tax filing," he added. "Ninety-two percent of al Minnesota filers now will take the standard deduction. It really will make a complex system a lot simpler."

The state also keeps the deduction for family dependents, or $4,205 for each child. That means a family of four will pay no taxes on its first $32,900 of income. "It's like a zero tax bracket. We'll have the third highest zero tax bracket in the nation," Marquart said. That will cost the state $135 million a year.

Tax cuts for middle class

The state also cut middle income taxes, from a 7.05 percent rate to a 6.8 percent rate, a tax cut that will cost the state $180 million a year. The new rate applies to income from $38,000 to $154,000 a year.

Business owners will also see a $50 million cut in what they pay in property taxes that go to the state.

Minnesota also cut another $10 million from what seniors pay in income tax on their Social Security benefits. Now 56 percent of seniors will pay no state income taxes on their Social Security benefits.

In all, the tax bill cuts about $600 million over two years. "We put a huge priority on benefits and cutting taxes for working families, seniors, farmers and small businesses," Marquart said. Lawmakers even exempted all state sales taxes for county fairs, enabling them to put that money back into their buildings and grounds.

Unexpected revenue source

The total tax bill will cost $850 million over the two-year biennium, with about $700 million of that coming from revenue that comes from conforming with the federal tax code. "You don't hear a lot about it, but the federal government expanded the tax base on business," Marquart said.

That includes revenue-raising changes such as limiting loan interest deductions for businesses to 30 percent; restricting net operating losses to 80 percent of income (it used to be unlimited); and capping losses at $500,000 for a married couple on pass-through business revenue.

The Legislature also approved $40 million for rural broadband expansion. "The Minnesota Broadband Office has really done a good job," working with broadband providers with a minimum of red tape, Marquart said.

Preserving healthcare

And a medical provider tax that was due to sunset was preserved and made permanent, although it was cut from 2 percent to 1.8 percent. That saved about $700 million a year for state healthcare funding, including MinnesotaCare and Medical Assistance for nursing home residents.

The tradeoff was no increase in the state's gasoline tax. Greater Minnesota does well in the 1956 gas tax formula, receiving two-thirds of the revenue but paying just 53 percent of the cost, Marquart said.

All in all, the session went well, he said. "I thought the governor did an excellent job, as did all the leaders," Marquart said, "It was an excellent session that will benefit rural Minnesota and Minnesota overall. We are the only divided state government in the nation, and yet we provided an excellent example (to Washington) of how to provide results for the people."