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Sharing the burden of hard times comes naturally in Minnesota.

That value is preached from the state's pulpits, is reinforced by a highly inclusive democracy and is demonstrated through countless personal acts each day.

Shared sacrifice should be the overriding principle for Gov. Mark Dayton and the 2011 Legislature as they complete the work of balancing the state budget in the next month.

If it is not, their efforts will do lasting damage to something that's been at the heart of this state's 153-year success story -- the sense that Minnesotans are all in this together.

Today, the editorial board describes its vision of a 2012-13 state budget that hews to the principle of shared sacrifice.

The Star Tribune's proposed budget closes the state's $5 billion forecasted gap between program costs and expected revenues with a mix of tax increases, spending cuts and a delay in a promised IOU payment to school districts.

It seeks to avoid the unfairness we see in the budget handiwork of both the Republican legislative majorities and the DFL governor.

The Republican budgets heap undue burdens on the state's largest cities, its colleges and universities, and the poor and disabled, while sparing the Minnesotans who have reaped the greatest rewards from the opportunities created in considerable part by this state's strong public sector.

Dayton's plan goes too far in the other direction. His budget piles higher taxes on a small, highly mobile sliver of the state's population while asking too little of the middle class.

Several other ideas also underlie our proposal:

• Minnesota needs reliable government again. The disruption and uncertainty caused by nearly a decade of recurring deficits must end. The next budget should be built with measures that last, not one-time payment delays, accounting gimmicks, unproven assumptions and raids on special-purpose funds and reserves.

• Minnesota needs to modernize government's structure. The jurisdictions that deliver K-12 and higher education and public safety, some dating from the 19th century, are overdue for cost-saving revision. The new budget should include incentives and deadlines to spur structural changes.

• Minnesota needs a more competitive tax code. Compared with other states, this one relies more on its personal income tax and less on sales tax. That difference comes with an increasingly steep competitive price. Raising revenue in a way that makes the sales tax a stronger workhorse would be a fine first step in a multiyear tax reform project.

Here's our $5 billion plan:

The K-12 IOU: $1.4 billion
Like Dayton and the Legislature, we propose to break the Legislature's promise to repay school districts $1.4 billion that was "shifted" away from them in 2010-11. It's time to concede that the "shift" was in fact a one-time cut. Not repaying it shaves the $5 billion forecasted deficit to $3.6 billion.

Spending cuts: $1.85 billion
We favor similar doses of spending cuts and tax increases to close the remaining shortfall. That puts our total spending at $35.75 billion, compared with Dayton's proposed $37.3 billion and the Legislature's $34 billion. Our total isn't just meet-in-the-middle pragmatism. It springs from these ideas:

• All of government -- K-12 education included -- ought to hear a clarion call to redesign their operations for greater efficiency and better outcomes. Lawmakers should deliver that message by sparing no spending category from cuts.

The Legislature would do well to push cuts into the second year of the biennium to create de facto deadlines for change. It should begin a move toward outcome-based payments -- for example, basing college funding at least in part on graduation rates and grads' employment rates. The state should also offer financial incentives to encourage the consolidation of local services and even some local jurisdictions.

• The unfairest tax of all, the property tax, has risen painfully in the past decade as state government has pushed its financial trouble onto local backs. Our plan goes easy on cuts to cities and counties in hopes of stabilizing local finances. We welcome GOP moves to beef up property tax relief for low-income homeowners in cities too affluent to qualify for state aid.

And we like the GOP idea of reducing the statewide property tax on Minnesota-based businesses so much that we included a $50 million cut in our plan. That regressive, hidden tax translates into lower wages and fewer jobs for Minnesotans.

• We would cut $900 million from state human-services spending in 2012-13, but would impose surcharges on health care providers where possible to draw down additional federal money that could in turn soften those cuts, perhaps by as much as half. Lawmakers should reject measures that would deny medical services to needy people. Instead, they should push hard for payment changes that create incentives for care managers to keep low-income people healthy enough to stay out of hospitals and nursing homes.

Net tax increase: $1.75 billion
If this year's budget crisis does not initiate tax reform, it will have been a crisis wasted. Minnesota gets 25 percent of its revenue from its sales tax; the 50-state average is 32 percent. Minnesota should move closer to the average, while still striving to spread the total state-plus-local tax burden equitably among all earners, rich and poor. Here's how we'd do it:

• Apply the sales tax to clothing. Minnesota is one of only five states with sales taxes that don't tax clothing purchases. That change would raise $650 million; our plan calls for $50 million of that gain to be returned to low-income taxpayers by one of several mechanisms available to lawmakers.

• Ask consumers -- but not businesses -- to pay a sales tax on a variety of professional services. Demography drives this choice. Older people buy more services than younger ones. Keeping aging boomers paying their share of sales taxes will help Minnesota provide their grandchildren with quality education.

• Boost Minnesota's cigarette and alcohol taxes. As Independence Party gubernatorial candidate Tom Horner often said last fall, no good public policy is served by cheap cigarettes. This state's beer and wine taxes are among the lowest in the region.

• An income tax increase on the state's top earners belongs in the mix. Ours is about a third as large as Dayton proposes. We call for a new top bracket with an 8.85 percent rate -- 1 percentage point higher than the current top rate -- for taxable incomes starting for married joint filers at $200,000. In ordinary income terms, that's about $250,000.

It may seem contradictory to call for greater reliance on the sales tax, and then include an income tax increase for top earners in our plan. Our reason goes back to where we started today's editorial.

Shared sacrifice must extend to this state's most successful citizens. They now pay an effective state-plus-local tax rate several percentage points lower than that paid by low- and middle-income Minnesotans. Yet our balanced approach to the budget also ensures that the state will remain competitive as necessary reforms take hold and the economy rebounds.

In time, we hope Minnesota can rely less on its income tax. But Minnesotans should never abandon their bedrock belief that every citizen shares a duty to contribute to this state's success.

A progressive income tax is required to put that philosophy into dollars and into action for the common good.

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