Under the Dome

Morning Memo: Amid crossover, the unfinished tax plan takes center stage

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.***

HOUSE OKs ABORTION EXCLUSION: Abortions will not be covered in North Carolina’s online health insurance exchange, which is coming as part of the federal Affordable Care Act, nor through the plans cities and counties offer their workers, under a bill tentatively approved 67-38 in the House late Wednesday night.
The bill would also allow any health care provider to refuse to participate in abortions; current law protects doctors and nurses. The bill only narrowly cleared a committee earlier in the day because of a controversial provision that would have allowed private employers to exclude contraception coverage in their health insurance plans. But behind-the-scenes negotiations Wednesday night led several key Republicans – including two of the bill’s main sponsors – to propose deleting that provision so the rest of the legislation would survive. Full story.

TODAY AT THE STATEHOUSE: The House will give final consideration to a handful of hotly debated bills that skated through in the late hours Wednesday. Speaker Thom Tillis doesn't expect to stay late again, though. Thank the bill limit for the nonconsecutive midnight sessions. The Senate is expected to wrap up it's work with speed as well.

HAGAN PUSHED LEGISLATION TO BENEFIT COMPANY AFTER TAKING BIG CAMPAIGN MONEY: From the Open Secrets blog--  "Last year, Sen. Kay Hagan (D-N.C.) took an unusual legislative interest in beauty products: She sponsored three different bills asking for a reduction in tariffs on certain eyelash curlers,pedicure and manicure sets and nail clippers. 

"According to paperwork filed by Hagan's office, the legislation would benefit Revlon. That company has a manufacturing plant in Oxford, N.C., but Hagan has another connection with Revlon --  MacAndrews & Forbes, the conglomerate that owns Revlon, was the 19th largest donor to hercampaign committee in 2012. The company's PAC gave her campaign $10,000 and individuals affiliated with the company (including two lobbyists working for the firm) gave another $9,500. Revlon's PAC gave another $2,500 to Hagan's leadership PAC.

"It is not uncommon to see members of Congress sponsoring legislation that specifically benefits one organization, often in the form of tariff reductions. But Revlon's lobbying on the bills combined with its generous contributions to Hagan suggests a double-barreled approach to cutting its tariff payments." More here.

HAGAN CAN EXPECT A FIGHT: The Southern Political Report takes an early look at the 2014 Senate race in North Carolina -- Moreover, the current freshman, US Sen. Kay Hagan (D), who will be up next year, has several controversial positions that will give her trouble, especially her recent support for same-sex marriage and for increased background checks for gun purchasers. While at least one poll showed the gun control vote might help her, it is problematic whether that would prove true in the rough-and-tumble of a campaign in which the National Rifle Association would be working to defeat her (the group gives her an “F” grade). Her 55% liberal voting record, according to the National Journal, makes her the 48th most liberal Senator, moderate enough, but also liberal enough to give the GOP plenty of votes to attack." Read more here.

AS IF ON CUE, the national and state GOP are pressing Hagan on the IRS investigation, faulting her for not raising concerns sooner.

ALSO HANGING ON HAGAN -- The federal health care law: From the Wall Street Journal: "Some restaurant operators are scaling back expansion plans because of uncertainty about the expense of insuring employees under the new federal health-care law. The concerns are especially acute among smaller operators who are more likely to be on the cusp of the Affordable Care Act's requirements for increased coverage of workers. The doubt is adding to anxiety over other rising costs for items like ingredients at a time when diners are cutting back on eating out.

Sam Ballas, chief executive of ECW Enterprises Inc., owner of East Coast Wings & Grill, a 26-unit chain in North Carolina and Texas, in March imposed a three- to five-unit limit, for the time being, on the number of restaurants that franchisees can own, because of worries about health-care costs. Full story.

STATE USES INCENTIVES MONEY TO BOOST AMMO MAKER: A privately held ammunition manufacturer says it's locating a new manufacturing facility in Robeson County, where it will create 150 jobs and invest more than $15.2 million over the next three years. Gov. Pat McCrory announced Wednesday that Cape Fear Arsenal will locate in Lumberton. Cape Fear Arsenal provides high quality ammunition products in the Southeast U.S. Its products will be primarily sold to law enforcement, and the company anticipates bidding on contracts for the military and state agencies. The project was made possible in part by a performance-based grant from the One North Carolina Fund of up to $490,000. Full story.

1,600 LAYOFFS EXPECTED: House of Raeford Farms will close its turkey slaughtering plant in Raeford in July and lay off 1,060 people. The company, which first announced plans to shutter the facility in March, informed the state last week that the plant would close by July 27. House of Raeford is also closing its turkey hatchery in Rose Hill and ending its relationship with about 140 turkey farmers in Eastern North Carolina. Full story.

FRANKLIN GRAHAM SAYS IRS TARGETED HIS CHARITIES: In a Tuesday letter to President Barack Obama, Franklin Graham charged that the two N.C. charities he leads were also targeted by the IRS for political reasons. Graham, who heads both the Charlotte-based Billy Graham Evangelistic Association and Boone-based Samaritan’s Purse, said in his letter that an IRS agent visited both organizations last October to conduct a review for the tax year ending in 2010.

This attention from the IRS came the same year the BGEA purchased full-page newspaper ads addressed to voters, Graham pointed out. In April, the group urged N.C. voters to approve a proposed constitutional amendment reaffirming the state ban on same-sex marriage. Then, during last fall’s presidential campaign, another BGEA ad encouraged voters to cast their ballots “for candidates who base their decisions on biblical principles.” Full story.

FORBES PIECE PANS TESLA BILL: From contributor Todd Ganos -- "Seeing a threat, the association of automobile dealers in North Carolina has protested to the state’s legislature, who in turn is pushing a bill to require automobile manufacturers to use in-state dealers to sell their cars.
"Of course, this reeks to high heaven.  It clearly is designed to protect home-state interests.  And, if passed, the law will likely be crushed under the weight of the Dormant Interstate Commerce Clause.  The law should be invalidated at the trial court level.  Other than minor legal wrangling, this matter should be of little consequence to Tesla. Full story.

ALSO: CNN feature the North Carolina effort against Telsa on Wednesday night.

TREASURER COWELL SPEAKS OUT: In a campaign newsletter, Democratic State Treasurer Janet Cowell used her campaign newsletter to vaguely criticize efforts at the state legislature. She writes: the belief "that some new policy is going to be the silver bullet to solve all of our problems" won't work. Specifically, she mentions managed health care instead of "capitalizing on the homegrown network of family physicians who improve health outcomes" and school vouchers, "when we really need to pay our teachers better."

ON ANOTHER NOTE: Cowell, a fitness buff, is joining the latest diet craze. "In recent weeks, in a continuing effort to eat healthier, I decided to try the Paleo diet. For those of you who do not know what that is, it is a diet that restricts you to things our cavemen (and women!) ancestors would have eaten -- vegetables, fruits, nuts, fish, and meat. No grains or beans, no dairy.

"My goal in undertaking this venture is to be healthier, to have more energy. I also wanted to enjoy and appreciate fresher foods more, along with the natural flavors that often get overwhelmed by all the sodium and sugar in our diets. So far so good. Fortunately, barbecue is allowed or I could not do this as an elected public servant in North Carolina!"

BELK AD ON LIMBAUGH SHOW DRAW QUESTIONS: Charlotte-based Belk Inc. found itself in the middle of an online battle between political partisans this week, when an ad featuring the company ran on conservative talk show host Rush Limbaugh’s radio program. The fight highlights the fine line companies walk with advertising and social media. The ad featuring Belk was apparently first noticed Monday by a group on Facebook that monitors Rush Limbaugh’s advertisers in an effort to pressure the talk show host financially. On Tuesday, the liberal website Daily Kos mentioned the ad in a posting. Full story.

FOXX HEARINGS SET: Charlotte Mayor Anthony Foxx, President Barack Obama’s U.S. transportation secretary nominee, will appear before a Senate committee May 22 to be questioned about his qualifications and views on transportation policy. The U.S. Senate Committee on Commerce, Science and Transportation will hold a nomination hearing for Foxx at 2:30 p.m., Chairman Jay Rockefeller announced Wednesday. At a later date, the committee will vote on whether to recommend Foxx for the Cabinet position. If the city’s Democratic mayor is endorsed by the committee, the full Senate would later vote on whether to confirm him, possibly in June. Full story.

BILLS TO AMEND GUN PERMITS STALL: About the only thing that proponents and opponents of tougher gun measures in the N.C. General Assembly agree on is this: The current permitting system isn’t working. Gun rights groups say sheriffs have too much leeway in determining who can get a permit to buy a gun. Gun control groups say the county-by-county permitting system prevents sheriffs from uniformly protecting the public because its vague standards are open to varying interpretations. After weeks of debate on dozens of measures, two bills that supporters say would strengthen North Carolina’s permitting system are expected to die on Thursday – the deadline for most legislation to pass at least one chamber of the General Assembly. Full story.

MEDICAID PLAN UNSETTLED: The McCrory administration’s plan to convert the $13 billion Medicaid program to managed care remains an outline as two top health officials travel the state pitching it to doctors and other health care providers. Dr. Aldona Wos, head of the state Department of Health and Human Services, told a crowd of doctors and other health care providers that she wanted them to help figure out the next steps. The aim is to integrate physical, mental and dental health and make costs predictable for the state. Full story.

LEGISLATIVE ROUNDUP: To get a summary of all the action from Wednesday at the statehouse, visit here.

TURF WAR RENEWED:  Amid accusations that legislators were targeting the Wake County school system, the state Senate approved legislation Wednesday that would allow Boards of Commissioners in nine counties, including Wake, to take over building and owning schools. Senate Bill 236 would allow boards of commissioners in those counties to take over all facets of school construction, including the locating, constructing, owning, maintaining, renovating and building of schools. These responsibilities have traditionally been held by school systems. Full story.


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