For a state that prides itself on being Minnesota nice, its political parties don’t seem to play by those rules.

And with a top-tier Senate race, some of the most competitive House races in the country and the Republican National Convention descending upon the Twin Cities, 2008 is shaping up to be a banner cycle for politics in Minnesota.

Enter the state Republican and Democratic-Farmer-Labor parties, two of the strongest operations of their kind in the country, according to Washington, D.C., observers on both sides of the aisle who work with state parties across the country. Over the past few cycles, the state DFL, and to a lesser degree, the GOP, have emerged to become some of the best funded, most organized and aggressive political parties in the country.

According to one Washington Democratic operative, Minnesota’s state party stands out as one of the strongest because it has an active and relatively large full-time staff, whereas many state parties only have a couple of full-time staffers when the party is not in cycle.

“It’s active,” said the Democrat. “They’re engaged. They exist year-round.”

Republican operatives say similar things about their Gopher State party. And it’s an advantage the Minnesota GOP will need this cycle with a broke National Republican Congressional Committee and cash-strapped National Republican Senatorial Committee.

Sen. Norm Coleman (R) is getting a challenge from comedian Al Franken (D), while Rep. Jim Ramstad (R) is retiring from his district, and in both races the state GOP is in a pivotal position.

The DFL has an opportunity to take Coleman’s seat and win in Ramstad’s 3rd district, home to one of the most competitive House races in the country. In the suburban Twin Cities district, state Rep. Erik Paulsen (R) is facing Iraq War veteran Ashwin Madia (D) for the 3rd district this November.

So why are these state parties different from all other state parties? First of all, the parties have the financial means to operate full research and grass-roots shops, unlike many other state parties across the country.

Party leaders point to Minnesota’s unique political contribution refund program as one possible reason the two parties are financially stable. Under the state-funded program, residents can donate $50 per person or $100 per couple every year to state political committees and receive a full refund from the state.

The result, according to party operatives, is a large low-dollar donor program that makes up a large chunk of the party’s operating budgets.

According to the Minnesota Campaign Finance and Public Disclosure Board, these refunds accounted for more than $3.2 million in donations to state parties in 2006. More than $4.1 million was donated to state parties through the program in 2004.

“It does quite a bit,” DFL Vice Chairwoman Donna Cassutt said. “We have a very large low-donor program and folks are willing to invest, obviously because of the refund program, and then they oftentimes reinvest what they’ve gotten back from the state.”

The contributions will likely play a considerable part of the DFL’s operating budget in 2008, which is said to be in the eight-figure range. With those funds, the DFL expects to expand its out-of-cycle staff of 10 to 12 people to a couple of hundred full-time paid staffers, including the coordinated campaign, by this November.

Republicans can also take advantage of those funds to help their budget, which is said to be in the seven-figure range. With an out-of-cycle staff of five to 10 workers, the Republican Party plans to have more than 20 full-time staffers by the election.

“I think we have a strong small-donor base, which comes from having a strong activist base,” state GOP spokeswoman Gina Countryman said.

Party operatives also attribute their low-dollar fundraising base to the state’s caucus system. Minnesota holds caucuses, followed by county, Congressional district and statewide conventions to determine their party’s preferred candidates for president, Congress and state offices.

This year marked unprecedented turnout for the caucuses, with more than 214,000 people caucusing for the DFL and 62,800 people caucusing for the GOP on Feb. 5.

And although 2008 was a caucus year for the record books, the system has always been the bedrock of finding grass-roots activists for the parties in Minnesota. With more than 4,000 precinct captains elected every two years, Minnesota parties have a natural building block for traditional grass-roots politicking.

The state also consistently scores one of the highest voter turnouts in general elections in the country. While that could be in part attributed to the state’s same-day voter registration, Minnesota still set the turnout record in 2004 with 77.7 percent, according to the secretary of state’s office.

“I think that in Minnesota we have a history of populism and people are very much involved in the political process,” Cassutt said. “While our caucuses and convention process may seem chaotic … folks really feel a sense of ownership in the party.”