Last week, all sides were praising the new teachers union contract for almost 4,000 teachers.
It took three years to negotiate and includes 20 percent pay increases over five years and includes, for the first time, millions in bonus money teachers could earn.
But where are Mayor Adrian Fenty and Schools Chancellor Michelle getting the money to pay for it?
The school budget issue exploded this week when Rhee told the D.C. Council that a current year budget surplus of $34 million would help pay for the raises next year. But shocked D.C. Council members quickly asked, if there is a surplus, why were 266 teachers fired last fall?
The resulting uproar has everyone diving for the budget books and it may not be settled until Chief Financial Officer Natwar Gandhi issues an audit report on the school funding, certifying that the dollars are there. But Gandhi's report may take several weeks.
Meanwhile, the Washington Teachers' Union is castigating Chancellor Rhee, saying the new budget dust-up confirms its view last fall that Rhee created a budget crisis as an excuse to fire teachers.
Rhee denies any ulterior motive, saying her budget calculations always have been guided by the CFO's office.
The bottom line is this: If there is a surplus in the budget, some D.C. Council members may try to force Rhee to rehire many of the fired teachers. But sources say if she does that, she'll have to rework the union contract and reduce the raises by 6 percent. Teachers who still have a job won't like that.
Expect more fireworks as Gray -- who's challenging Fenty for mayor in the Sept. 14 primary -- presses this issue. Is there money in the budget for the raises and other union contract benefits, or not? And if not, what is the city going to do?