RALEIGH, N.C. — In their first day back at work for the "short session," North Carolina lawmakers filed bills to pay for reparations to victims of the state's eugenics program and to patch a hole in Medicaid funding.

The General Assembly's main job for the roughly six-week "short session" is to change parts of the second year of the two-year budget approved last year, and legislative leaders have said that is where they will focus their energies.

They have the option of taking up other topics such as gambling, hydraulic fracturing and a proposed public education overhaul.

Senate leaders moved immediately on a Medicaid bill, authorizing the budget director to move money from the General Fund, the Department of Health and Human Services and elsewhere to fill a $205 million gap in funding.

In the House, members agreed to a recommendation that eugenics victims be paid $50,000 each for their pain and suffering.

Budget is the big agenda item

Republicans, who took control of the Legislature after the 2010 elections, insist they will pass a budget that does not include the higher temporary sales tax called for by Democratic Gov. Bev Perdue. If the two sides reach a stalemate, Republicans could go home without adjusting the budget.

Sen. Pete Brunstetter, R-Forsyth, the lead budget writer in the Senate, called that option "a very viable strategy" for Republican leaders, who hold the upper hand over the lame duck governor. 

"We've heard the people of North Carolina tell us that we want a leaner, meaner state government ... and that's what we're going to look at in this budget," said Rep. Harold Brubaker, R-Randolph, senior co-chairman of the House Appropriations Committee. He said the House version of the budget could be on the floor next week.

Parties have some points of agreement  

Republicans in both chambers and Perdue both are interested in lowering the state gas tax and placing a temporary cap on the rate. The current tax of 38.9 cents per gallon was already expected to fall automatically July 1 by more than a penny.

House Majority Leader Paul Stam, R-Wake, said he expects more money to be spent on public education this year because there's a little more money — the state has a revenue surplus of more than $230 million for the fiscal year that ends June 30.

Sen. Phil Berger, the president pro tempore of the Senate, and his lieutenants also want to pass a package of education initiatives that would eliminate tenure for public school teachers, offer performance bonuses and merit pay for teachers and expand early reading skills for students. Stam said he likes most of the components but said they may be too much to complete in the "short" session.

The General Assembly has other issues that legislators want to resolve before going home, probably in early July.

Lawmakers are expected to consider changing state gambling laws needed for an updated gambling compact reached in November between Perdue and the Eastern Band of Cherokee Indians to be carried out.

The tribe would be permitted to offer live dealer gambling at its western North Carolina casino. The state's school districts would get a share of revenue from the new games, which Perdue said could also create hundreds of new jobs. A coalition of social conservatives and liberal Democrats opposed to gambling could refuse to pass the gambling law changes.

Lawmakers will also consider whether to change new involuntary annexation laws to respond to a court decision that rejected a new method the Legislature approved in 2011.