Although the 2011 legislative session is just two weeks old, Republican lawmakers already are sparring with Democratic Gov. Bev Perdue over spending cuts — setting the stage for a potential veto of the first bill passed by both chambers of the General Assembly.

A tense debate over Senate Bill 13, the Balanced Budget Act of 2011, highlighted the second full week of the legislature’s session. If signed into law, it would give Perdue authority to slash an additional $400 million from the budget.

A more controversial provision would siphon funds from several economic development accounts that Democrats have tightly guarded for years, including the Golden LEAF foundation, Job Development Investment Grants, and the One North Carolina Fund.

Meanwhile, other top reforms on the GOP’s agenda, including bills addressing the charter school cap and the federal health care law, remained bottled up in committee this week.

Legislative leaders also fast-tracked two bills aimed at reforming the state’s regulatory environment, and Perdue announced a 27-percent reduction in the projected state budget shortfall — from $3.7 billion to $2.7 billion.

Incentives rift

S.B. 13 garnered hours of contentious debate this week. The bill passed the Senate by a party line 31-16 vote Monday, and the House followed suit Thursday by a 66-51 margin. Republicans said the bill is needed to shore up the state’s fiscal house, but Democrats charged that it would be a jobs killer.

“Everything we heard leading up to this session was about jobs,” said Senate Minority Leader Martin Nesbitt, D-Buncombe. “We’ve been here three weeks, and the best we can tell, we’re going backwards, not forwards. We haven’t seen a major jobs bill from the leadership, and in fact the Senate bill that we’ve debated on the floor actually took money from job-creation programs.”

Senate President Pro Tem Phil Berger, R-Eden, cast the debate over S.B. 13 as a philosophical struggle between believers in big government and small government.

“The mentality that the government creates jobs is a false idea,” Berger said. “The government does not create jobs. The government can create an environment that enables the private sector to create private sector jobs. Ultimately, that’s the debate we have to have.”

Perdue has suggested, but not confirmed, that she’ll veto the bill. Republicans’ 68-seat majority in the House wouldn’t be enough to overcome such a move. Their 31-seat majority in the Senate would be.

Regulatory reform

Two measures aimed to reforming North Carolina’s regulatory environment got hurried through the Senate with little partisan rancor.

Senate Bill 22, APA Rules: Increasing Costs Prohibition, passed the Senate Wednesday with only one dissenting vote. It would amend statutory law to prohibit, in most situations, new regulations that would hit North Carolinians in the pocketbook.

A second measure — Senate Bill 17, Joint Regulatory Reform Committee — would create a joint House and Senate study committee to research the regulatory environment and make recommendations to the General Assembly. It passed the Senate unanimously Tuesday.

Perdue recommended reforms of her own, namely the elimination of 900 rules and regulations she deems “unnecessary and excessive.” The move is another step in Perdue’s efforts to overhaul state government.

“In this kind of economic climate, it’s my job to be sure that we root out any of those unnecessary costs from the equation as we try to continue this healthy recovery,” Perdue said.

Health care, charter schools

A hot topic in recent days — a bill that would allow North Carolinians’ to opt out of the federal health care law’s individual mandate — didn’t garner much attention this week.

House Bill 2, the Protect Health Care Freedom Act, passed the House Feb. 2 in a 66-50 vote. Beyond the opt-out, the measure also compels Attorney General Roy Cooper to join a multistate lawsuit challenging the constitutional of the health care reforms.

The Senate Judiciary II Committee OK’d the bill by voice vote Thursday without debate. The legislation now goes to a vote of the full Senate and, if approved, to Perdue’s desk.

A bill that would lift the 100-school cap on charter schools, and make a number of other reforms to the charter-school law, also didn’t see much movement this week. It remains in the Senate Education/Higher Education Committee.

During debate Wednesday, committee members adopted several amendments to the bill. One creates a charter-school advisory committee to the State Board of Education, ensuring that oversight of the schools would remain under the Department of Public Instruction.

A committee vote on the bill is expected next week.

Bills introduced

Legislators introduced several bills this week that could come up in committee in the short term. Senate Bill 64, Restore Partisan Judicial Elections, would return state judicial elections to a partisan basis, meaning that judges and justices would have their party identification listed next to their names on the ballot.

House Bill 61, Speaker/Pro Tem Term Limits, would restrict individuals from serving as top leaders in the House and Senate for more than two sessions of the General Assembly.

David N. Bass is an associate editor ofl Carolina Journal.