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TODAY AT THE STATEHOUSE: Monday legislative sessions are typically quiet but Republican lawmakers are using the first one this year to push two major proposals to overhaul unemployment benefits amid the state's $2.5 billion debt to the federal government (House) and block the expansion of Medicaid under the federal health care law (Senate). The floor action for both chambers starts at 7 p.m. Gov. Pat McCrory lists no public events today.

WHAT TO WATCH FOR: Republicans have the votes to pass the measure but the question is how big a fight Democrats will mount. The tone and strategy of the Democratic opposition will help define the partisan relations this legislative session and signal whether the minority party will acquiesce to GOP supermajorities or make their lives difficult.

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UPDATED: IS IT MAYOR PAT OR GOVERNOR PAT? Gov. Pat McCrory told two city of Charlotte staff members this week that state money for the light-rail extension to UNC Charlotte could be at risk if the city builds a controversial streetcar, according to a memo sent Thursday. Without the N.C. Department of Transportation’s $250 million grant, the $1.1 billion Lynx Blue Line extension can’t be built. As Charlotte mayor, McCrory, a Republican, championed light rail, which was one of his signature accomplishments. But he vehemently disagrees with using city property tax dollars to build a streetcar, and used the meeting in Raleigh to relay a message to City Council, according to the memo.

FOXX 'OUTRAGED' OVER WHAT HE CALLS A THREAT: “It’s particularly alarming that he would choose to deliver messages to city staff, particularly messages that contain threats," said Charlotte Mayor Anthony Foxx, a Democrat and potential challenger to McCrory in 2016. “He is governor of the state, and there are a host of issues – tax reform, health care. Why the governor would choose to place focus on a transit project, particularly one contained in a transit plan that he voted to implement makes no sense,” Foxx said.

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ROCKY MOUNT -- In the metro area with the highest jobless rate in the state, Gov. Pat McCrory announced Thursday that he would support legislation to reduce benefit payments for unemployed workers to speed payment of the state's debt to the federal government.

McCrory acknowledged that it was "not an easy decision for me because there are people hurting right now." He made the announcement at an Rocky Mount Area Chamber event, where the unemployment rate is 12.5 percent, well above the state rate of 9.2 percent.

But the Republican governor argued that "total reform" is necessary to pay down the state's $2.5 billion unemployment insurance debt to the federal government more quickly, even if it means the loss of extended federal benefits for 80,000 jobless workers, amounting to roughly $25 million a week.

"I'm saying right now let's pay off the credit card," McCrory said. "Because the longer we are on that credit card, paying interest ... the bigger the hole gets for you. And that's exactly what is happening in North Carolina."

TODAY IN POLITICS: Gov. Pat McCrory will address the media for the first time since his inflammatory comments about higher education funding and liberal arts studies at a 10 a.m. press conference ostensibly about the state's Medicaid system. At the statehouse, House lawmakers will consider a controversial bill to curtail unemployment benefits while senators work on legislation to block the expansion of Medicaid under the federal healthcare law. In Washington, the confirmation hearings for Defense Secretary nominee Chuck Hagel begin as U.S. Sen. Kay Hagan faces pressure in recent TV ads to vote against.

OP-ED: McCRORY'S EDUCATION REMARKS BETRAY CONSERVATIVE PRINCIPLES: Political communications consultant and college lecturer Jonathan Riehl and former Reagan campaign official Scot Faulkner write in this morning's N&O: "With the governor’s star rising in the GOP, his comments no doubt were strategic. They also represent a total betrayal of conservative principle."

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Americans for Prosperity is pushing for a full slate of what it calls "free market" policies in the upcoming legislative session -- including a constitutional amendment to limit government spending.

Dallas Woodhouse, the state director for the conservative group, said he expects much of the agenda to win approval given the supermajority Republican legislature -- one he views as more conservative than the previous session under GOP control. "We like our options better than when (Democrats where in control), there's no doubt about it," he said.

A pro-business group is releasing a study Monday that outlines four options for overhauling taxes in North Carolina -- the latest proposal in the mix ahead of the legislative session.

The Tax Foundation study was commissioned by the Carolina Business Coalition -- a limited government, low-taxation interest group whose board includes former Republican Gov. Jim Martin. Its options put everything on the table -- but favor businesses more than other plans. (None include the business license tax Senate Republicans have suggested nor a repeal of all tax exemptions currently in law.)

Here are the options identified in the study, obtained by Dome. (Click link for full study.)

Option A: 6 percent income tax, 3.5 percent sales tax, repeal corporate and franchise taxes

Option B: 5 percent income tax, 5 percent sales tax, 5 percent corporate income tax and repeal the franchise tax

Option C: 8.75 percent sales tax, no income tax, repeal corporate and franchise taxes

Option D: no state sales tax, 10 percent income tax, repeal corporate and franchise taxes

Document(s):
North Carolina Study.pdf

COLUMNIST -- CAN'T BAN POOR FROM THE LOTTERY: You got any dreams? We want them, too. That’s what comedian Richard Pryor swears his wife’s attorney asked him when they showed up in divorce court. That’s also what State Rep. Paul Stam is saying to welfare recipients in North Carolina by proposing a measure that would prevent them from playing the lottery.

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JINDAL TO GOP: STOP BEING THE STUPID PARTY: Louisiana Gov. Bobby Jindal on Thursday night challenged fellow Republicans to “go after every voter” and cautioned them to “stop being the stupid party.”

“It’s no secret we had a number of Republicans who damaged the brand this year with offensive and bizarre comments,” he told around 200 members and guests of the Republican National Committee at the Westin hotel. Jindal, considered a possible 2016 presidential candidate, said Republicans can beat Democrats on their ideas while appealing to all Americans – beyond Washington.

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Economist Art Laffer told state lawmakers that the movement to overhaul the tax code in North Carolina is crucial to the national "fight for a different sort of economics."

"You are wearing the white hat," he said. "Don't let them take the white hate off you. Go to the goal line."

Laffer, the conservative economist and trickle-down believer, gave the keynote address at a "training" for state lawmakers hosted by the Civitas Institute, a conservative political organization.

The event featured presentations from a number of state lawmakers from outside North Carolina who are members of the American Legislative Exchange Council, known as a ALEC, a controversial group that pushes "model legislation" based on conservative ideology.

Tens of thousands of unemployed workers receiving federal emergency unemployment will likely lose their benefits starting July 1 as legislators overhaul the program.

Legislative leaders said this week that they will push ahead with a July 1 start to cuts in weekly benefits for unemployed workers. The measure would put the state in violation of the recently passed federal relief package that would have provided benefits to laid-off workers through December 2013. The federal legislation specifically forbid the states from altering the weekly benefit amount, which the General Assembly is poised to do as it returns to session Wednesday.

“It interferes with our expected legislation that we already had ready to go in December. We won’t let it continue,” said Rep. Julia Howard, R-Mocksville, head of the House Finance Committee who is shepherding a bill that would overhaul the unemployment system.