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HOUSE TO UNVEIL TAX PLAN OUTLINE:House Republicans plan to offer their own North Carolina tax overhaul plan Thursday that would reduce personal and corporate income tax rates and expand the sales tax to cover more services. The proposal's scope is much narrower than what Senate counterparts offered as GOP legislators try to fulfill a commitment to carry out tax reform this year.

The plan attempts to simplify income taxes and reduces the number of income tax brackets from three to one, according to the proposed legislation obtained by The Associated Press. House Republican leaders want to reduce slightly the combined state and local sales tax consumers in most counties pay from 6.75 percent to 6.65 percent. They also would subject the sales tax to a handful of new services such as automobile repairs and installations for personal property and warranty and service contracts, the bill says. In contrast, the Senate proposal unveiled last week would make the sales tax base one of the broadest in the country. More here.

NORQUIST TO BLESS SENATE TAX EFFORT: Americans for Tax Reform leader Grover Norquist will stand with Senate leader Phil Berger at a 9:30 a.m. press conference Thursday to talk about the Senate's tax rewrite. The visit is being coordinated by Americans for Prosperity, an advocacy group that pushing hard for a major tax overhaul measure this session. Opposition groups already are framing the visit, saying Norquist will support a bill that could raise taxes on a majority of people in the long-term. A luncheon with tax activists outside the legislature will follow later in the day.

Good Morning! This Dome Morning Memo is (unofficially) brought to you by Krispy Kreme donuts and coffee -- which is much needed after the House worked near midnight to beat the crossover deadline on a bevy of controversial bills in a 10-hour session. If you went to bed early, click below for all the North Carolina political news and analysis.***

State Treasurer Janet Cowell is asking state lawmakers to stop advancing legislation to help the payday lending industry. Cowell, a Democrat, sent a letter to N.C. General Assembly members expressing her opposition to House Bill 875 and Senate Bill 89, especially after working to eliminate the practice seven years ago. "We cannot grow our state economy when citizens are trapped in debt they cannot hope to repay," she wrote in the letter. "We need to keep payday lending out of our state." Read the full letter below.

Document(s):
Payday Lending Letter to General Assembly.pdf

McCRORY TO ANNOUNCE MEDICAID SYSTEM OVERHAUL: Gov. Pat McCrory rejected a Medicaid expansion earlier this year saying the system was broken and Wednesday morning he is expected to describe how he plans to fix it. The Republican has talked frequently about the rising costs of the healthcare system for select low-income and disabled residents and issued a video preview Tuesday saying he would create a "partnership" that will help keep costs low. Check Dome later today for more details from the 10 a.m. press conference.

***It's a jam-packed day in North Carolina politics. Get the full scoop on all the big stories from the Dome Morning Memo below. Send tips and news to dome@newsobserver.com.***

The creation of a Charlotte airport authority would raise thorny legal issues involving airport debt and could even affect the cost of state borrowing, the N.C. Treasurer’s office said Monday.

Deputy Treasurer T. Vance Holloman said legal uncertainty over the airport’s $860 million debt “could result in potential prolonged litigation.” He said transfer of airport control from the city of Charlotte to a new authority “could affect the cost of borrowing and desirability of North Carolina revenue bonds.” He urged lawmakers to “proceed cautiously.”

Holloman made the comments in a letter to Sen. Bob Rucho, a Matthews Republican and a main sponsor of legislation that would create an independent, 13-member authority to run Charlotte Douglas International Airport. Full story here.

State Treasurer Janet Cowell is preparing to play a more prominent role in helping Democrats push their message amid complete Republican control of the lawmaking process.

Cowell, a second term Democrat, is adding staff and planning to expand her portfolio. "I do feel more incumbent to take a broader policy role," she said, given the dearth of prominent Democrats. "I sit on the school board --that's an area where when I was one of more Democrats I didn't have to take as much interest or carry the water where I may be having to do that now."

GOP FLIRTS WITH CHARLOTTE: Could Charlotte do for Republicans in 2016 what it did for Democrats in 2012? The Republican National Committee’s meeting in Charlotte this week has fueled speculation that the GOP might return for its national convention in four years. “It’s always a possibility,” GOP Chairman Reince Priebus said Wednesday at the Westin hotel. “North Carolina was good to us. And it’s a red state – all the more reason to look at Charlotte.”

AFP TOUTS GOP REIGN IN NORTH CAROLINA: Tim Phillis, the national president of Americans for Prosperity, writes in a Politico op-ed that North Carolina is a state where the GOP plans to make a difference. It starts: "In Raleigh, N.C., on Jan. 11, a new free-market Republican governor celebrated his gubernatorial win at the inaugural balls. The occasion was historic for North Carolina: the first time since Reconstruction that a conservative GOP governor will be joined by free-market GOP state legislative majorities in both state legislative chambers." Read full piece here.

***This is the Dome Morning Memo a digest of important N.C. political news. Click below for more.***

UPDATED: Wake school board members Debra Goldman and Chris Malone found themselves in a messy situation, which strained the rest of the board. Now it could affect the November election. Goldman is the Republican candidate for state auditor and Malone is seeking a N.C. House seat.

More political headlines:

--The race for lieutenant governor may be the highest office Democrats can win. Democrat Linda Coleman faces  Dan Forest, a conservative, tea party Republican. Meet the candidates.

--In case you missed it, here's a profile of GOP gubernatorial candidate Pat McCrory, whose shifting politics has put him in the lead.

--Rob Christensen writes about the intersection of Bill Friday and politics.

The two major-party candidates for governor both stress close connections between education and business but approach the question of improving education from different angles. Democrat Walter Dalton would extend already established paths, while Republican Pat McCrory’s education proposals have the potential to remake the state’s public education system from kindergarten through college.

Read about education in the governor's race, the third installment in a series, and see a graphic of how the plans stack up.

More political headlines:

--On Tuesday, it will be four weeks before the Nov. 6 elections – let the countdown begin. We have had our first debates, more ads than you can shake a stick at, and more than a few motorcades. Read Rob Christensen's tutorial on what to expect in the closing month.

In construction projects, some workers are treated them like ghosts, paid under the table and never acknowledged. A News & Observer review of state Industrial Commission decisions, in which arbitrators sort through workers’ compensation claims, shows the practice is common and has penetrated other industries.

But as honest businesses have struggled to compete, North Carolina officials have barely paid attention. Read the first installment in the Ghost Workers series, as well as stories about tax dodging companies and hear a worker's story.

Much more politics below:

--In his column, Rob Christensen describes how a local focus group sees the 2012 election: Watching a group of Walmart Moms discuss the presidential election last week, shed some light on why North Carolina is regarded as a toss up state.

--A holy war is engulfing the N.C. statehouse ministry for lawmakers, a $1.1 million operation.

--Even before GOP presidential hopeful Mitt Romney picked U.S. Rep. Paul Ryan as his running mate, Ayn Rand was enjoying an unusual boom in university classes, particularly in North Carolina, thanks to tens of millions of dollars in grants from a Winston-Salem-based bank.

The latest version of a debt affordability study issued by State Treasurer Janet Cowell again concludes that North Carolina has exhausted its debt capacity for another fiscal year, the Insider reports. 

The study recommends that state lawmakers avoid additional borrowing for the 2012-13 year to keep the state's debt service at the recommended level of 4 percent of General Fund expenses. "The slow recovery, in combination with the reduction of the state sales tax rate, has resulted in another year of no debt capacity," Cowell said.