Governor Schwarzenegger just wrapped up a campaign event outside the Capitol in support of Proposition 11, but all the questions (damn pesky reporters) were about the state's ailing finances.

The questions come on the heels of a much talked about private meeting the guv held Tuesday with education lobbyists and advocates -- a meeting where he reportedly said things are bad, and public schools will bear part of the burden.

Schwarzenegger reiterated that message in public today.

"Since everyone has to take a haircut," said the governor, "it's natural that education has to take a hit."

The entire comment that was lifted from is below, where the guv goes on to talk about the need for "creative" solutions to what may now be a $10 billion... or more... shortfall.

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As you might imagine, the education community takes issue with how much of a trim that schools might be getting in any budget cutting propopsal. They're calling talk of a $3 billion cut in education sectors a "catastrophe."

Expect such talk, and fighting, to dominate California political circles a week from now, when Schwarzenegger officially summons lame duck legislators back to Sacramento.