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RALEIGH — Lawmakers are getting ready to take up a tax reform effort that could change how much, when and who pays for most government services through taxes.

While there is broad agreement among legislators that North Carolina’s tax system needs an overhaul, it is less clear how quickly any such rewrite could happen and whether it could earn bipartisan support.

“There’s a need to move in that direction and I think we will,” House Speaker Joe Hackney said in a recent interview. “But it needs to be done carefully and with full thought.”

The House and Senate finance committees are due to begin a series of meetings on Nov. 3, according to House Finance Committee chairman Paul Luebke.

North Carolina’s tax system is based on the model put together in the 1930s, when big manufacturing businesses were on the rise and the state faced a fiscal crisis during the Great Depression. Over the years, the system has been tweaked — exceptions, caveats and loopholes created — but it is essentially the same.

At the same time, the economy has shifted and the tax revenues have experienced mercurial swings — flooding state coffers during flush times and drying up during economic downturns when they’re needed most.

“It’s like a roller coaster. It swings very high and then very low,” said Sen. Dan Clodfelter, a Mecklenburg County Democrat, a Senate finance chairman who has been one of the leading voices calling for changes in how state taxes are collected.

The result, he said, has been tax rates that have climbed while not collecting much more money or equitably distributing the costs associated with running the government.

Hackney, a Chapel Hill Democrat, and other House leaders resisted Senate efforts to remake the state’s tax system this year, in large measure because they said Senate proposals lacked enough specifics. There was never a formal bill filed nor time to vet proposed changes as lawmakers dealt with an increasingly dire budget shortfall.

Hackney said any tax reform process needs to include public hearings and needs to garner the support, or at least the input of, Republicans. Democrats control the House and Senate.

Like Hackney, Gov. Bev Perdue was cautious in the spring and early summer about the prospects for tax reform. But after the budget was signed, Perdue embraced the tax reform banner as her own.

“It’s a huge must-do for me and for the people of North Carolina,” Perdue said in August.

In concept, what lawmakers of all stripes say needs to be done is simple:

l Broaden the base: Increase the number of things that are taxed. In large measure, this would include applying sales taxes to services. Lawmakers also have talked about changes to how individual and business income are taxed.

l Lower the rates: If a tax applies to more items, the state doesn’t need to charge as high a percentage on each item.

Proponents say any tax reform proposal also should be “revenue neutral.” In other words, the new tax system should take in the same amount of money as the current system.

“I’m not optimistic that’s the direction it’s going to take,” said Sen. Phil Berger, an Eden Republican and his party’s leader in the Senate.

He notes that a tax reform plan outlined during the session in the Senate would have raised $500 million more than the current system did.

Berger said any tax reform effort should be coupled with controls on government spending. Republicans have frequently called for measures that would legally restrain growth in the state budget to a percentage based on the growth of the state’s population and inflation.

“What we may end up seeing is a tax system that generates more tax dollars, which will ultimately fuel more government spending, and I can’t feel good about that,” Berger said.

But Clodfelter argued at a Greensboro Bar Association forum at Elon Law School last week that a remade tax system would impose the kind of fiscal discipline that Berger wants. But he said the kind of outside spending curbs that Berger wants aren’t practical.

“We don’t grow the state budget just to meet inflation and population growth,” Clodfelter said. “The things that drive the state expenditures and those grow at different rates relative to the revenue that support them.”

For example, he said, demand for new roads and road repairs sometimes grows more quickly than the population.

Luebke and Clodfelter said the discussions would focus first on remaking the sales tax system.

Whether other parts of the system get a look before the General Assembly comes back in May is uncertain, Luebke said.

“We’re starting with sales tax reform and will see how far we can go with that,” Luebke said.

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com