Here we go again

If the ongoing budget debate has shown us anything, it is the strangeon-again, off-again relationship between Gov. Schwarzenegger and public education. And in case you're keeping score at home, that relationship seems to be in off-again mode...

Capitol Weekly reports, "Plunging state revenues –down in May and June by as much as $1.8 billion below official expectations -- could wind up costing public schools as much as $8 billion in money they say is owed to them by the state.

The state’s worsening fiscal picture sets the stage for the latest chapter in the tempestuous, love-hate relationship between education groups and the Schwarzenegger administration that has marked the governor’s six years in office.

"Some education advocates, most notably the California Teachers Association, entered an uneasy truce with the governor through the May 19 special election. But that truce now appears to be over as CTA takes to the airwaves to blast the governor, and Schwarzenegger talks about the need to suspend the Constitution to cut payments to schools.

"While a major political fight is brewing over whether to suspend the Proposition 98 constitutional guarantee to public schools for the new 2009-10 fiscal year, the bigger financial question is over the revenues for the 2008-09 fiscal year that just ended, and whether falling revenues could alter the money owed to schools over the next several years.

"It is a battle that the Schwarzenegger administration and the CTA sought to avoid by asking voters to approve Proposition 1B on the May 19 ballot. That measure would have guaranteed that the state must give the schools billions in back payments over the next several years.

John Myers reports,  "The debate over erasing California's massive budget deficit may now be headed into a new, and particularly bitter phase... as arguably the state's most powerful interest group hammers Governor Schwarzenegger for his suggestion to further reduce spending on public schools."

Myers links to CTA's new ad hitting the governor, and writes, "Capitol types have been buzzing about the ad for the better part of a week, since the new budget year began with word that Schwarzenegger may recommend a suspension of the school funding guarantee, Proposition 98. You're likely to see it on TV stations statewide in a matter of days or even hours. The ad returns us to the days of yesteryear -- 2005, to be exact -- the year when the CTA, allied with other powerful labor unions, obliterated both Schwarzenegger's job approval ratings and his vaunted special election ballot measures."

Ah, yesteryear...

The Chron's Matthew Yi reports the govenror's borrowing plan could put federal stimulus funds in jeopardy. "Gov. Arnold Schwarzenegger's budget package, which he has touted as a way to solve the state's entire deficit, has a glitch that may jeopardize $10 billion in federal stimulus funds for California's public schools, colleges and prisons.

"It's a problem Schwarzenegger's finance experts are trying - with much difficulty - to work around, said H.D. Palmer, a spokesman for the governor's Department of Finance.

"We're working on several options," he said.

Democratic lawmakers say the Republican governor has no business criticizing their budget plan as incomplete when his own is far from perfect.

"It just shows that there's rhetoric and reality," said Senate President Pro Tem Darrell Steinberg, D-Sacramento. "He's made these bold pronouncements that even he can't deliver on in many cases, and this is a good example."

Steve Harmon reports that some are accusing the govenror of balancing the budget on the backs of poor people .

"Now, critics are saying Schwarzenegger is rolling out standard Republican demagoguery on welfare by making accusations over fraud in social services programs such as CalWorks and In Home Social Services.

"I've never liked when people pick on the poor because they haven't got the ability to fight back," said John Burton, the state Democratic Party chairman and former Senate leader known as a fierce advocate for the poor. "It's a Republican syndrome. It isn't tough for Republicans to beat up on poor people. When finances are terrible, they go after the poor and blame the poor. Republicans constantly use that and don't worry about all the benefits government gives to businesses."

Capitol Weekly's Lynne La reports, while some banks may not take IOUs, there's a robust market for IOUs on eBay. " From Hebrew lessons to personal biographers, anything can be bought and sold at online classified websites like Craigslist and eBay – including state-issued IOUs that the government has been distributing since last week.

"Officially known as registered warrants, these IOUs are a partial, short-term solution to the cash-flow crunch resulting from the state’s $27 billion deficit. With a 3.75 percent annualized interest rate, vendors, taxpayers and creditors can expect to redeem their IOUs to the treasury’s office on Oct. 2.

"But for those who cannot wait that long, a number of informal buyers have been cropping up online to buy IOUs immediately, in hopes of making a profit by the time the state deadline rolls around. It is the second time since the Great Depression that California has issued IOUs to cover its bills.

LA Observed unveils Antonio Villaraigosa's secret Twitter identity . "Back in June, when I posted about Mayor Villaraigosa's Twitter updates lagging behind by hours, the account at HTRimalower tweeted the link and a question: "Why is L.A.Observed hating on me?" An LAO reader pointed it out to me tonight after tracking the account to Harry Tomás Rimalower, a Harvard undergrad from Los Angeles who has posted online that he is a new media intern for Villaraigosa."

Speaking of LA, LA TV has it's car chases, but it's got nothing on this. "A drunk German sparked a slow-speed police chase after stealing a tractor to get home from a nightclub after his girlfriend left without him, said police, who used pepper spray to try to stop the vehicle.

"After his girlfriend abandoned him in a night club, the 23-year-old driver, who doesn't own a license, commandeered the vehicle to make his way home," a police spokesman said on Monday.

"Six police cars began trailing the tractor, which was chugging along at 20 km (12 miles) an hour, after they were alerted to the theft at about 5 a.m. Saturday."