Republicans in control of the General Assembly have vowed not to increase taxes to close an estimated $3.7 billion budget gap. But Democrats and liberal advocacy groups are countering that state residents favor some tax increases and elimination of tax loopholes over budget cuts that could eliminate thousands of teaching positions in the state.

Polling released by the liberal coalition Together NC, shows that 71 percent of North Carolina residents favor a continuation of the one-cent increase in sales tax “to continue saving state programs.” That one percent raises around $1.3 billion in revenue, more than a third of the budget gap. “People across our state know that investing in critical services like education is the best way to save jobs and boost the economy,” said Rob Thompson, a spokesman for Together NC.

Other fixes to the budget shortfall, pushed by Together NC and supported by a majority of the public according to polling commissioned by the group, looks similar to changes advocated by state Treasurer Janet Cowell. Earlier this month Cowell toured the state speaking to local chambers of commerce as part of a push for her  “no tricks” plan.

The treasurer’s plan centers around three areas of taxation: corporate, personal income and sales tax. She proposes to capture more in each area by broadening the base and while reducing each of those three rates by one percent.

Applying the sales tax to a broader range of services is one idea that Together NC suggests, with 65 percent of respondents agreeing with the proposition in this question:

“Currently in North Carolina, there is a general state sales tax on goods and services such as alcoholic drinks, boats, cable services and dry leaning.  However, services such as limousine services, landscaping or accounting services are not subject to the state sales tax.  Adding more services to the sales tax base would let us lower the overall sales tax rate. If it lowered the overall sales tax rate, would you support or oppose expanding the state sales tax to include additional services?”

Cowell’s plan would also tax many more services, generating between $600 and $900 million in additional revenue.

Another question polled by Together NC addresses tax loopholes. A whopping 79 percent of North Carolinians answered ‘yes’ to this question: “The State Department of Revenue has issued a report identifying $5.8 billion in tax loopholes, credits and exemptions that benefit individuals and businesses. Do you think the governor and legislature ought to close loopholes before making cuts in state services?”

Cowell also suggests tweaking corporate taxes, but not in the same manner. Her plan would switch corporations to a system of “combined reporting.” Under the current system, “many multi-state corporations siphon money to subsidiaries in other states and avoid their share of the tax burden, while smaller, in-state businesses bear a higher burden,” according to documents provided by the Treasurer’s office that detail Cowell’s reform plan.

Cowell’s last step in reforming the tax code would probably rival, if not exceed, closing tax loopholes for businesses. She proposes to change the way personal income is taxed and lowering the rates by one percentage point. By moving to a system of Adjusted Gross Income — as done by 29 of the 35 states that tax personal income — revenues would become less volatile because of, once again, a broader base of taxation. AGI is defined by Cowell as “a person’s gross income reduced by business expenses, health savings accounts, IRA contributions and other federally defined adjustments.”

Cowell’s ambitious plan outlines a vision for dealing with recurring budget shortfalls, and liberal allies seem to agree on the basics of how to update the tax code. The question is when will Democrats again have majorities in the General Assembly and a governor to enact it?