Gov. Arnold Schwarzenegger and legislative leaders emerged from a meeting Wednesday saying they’re confident California will be able to repay up to $7 billion in short-term loans, even as the state treasurer estimated the state’s revenues are likely to drop another $3 billion below projections.

 

But they offered no explanation – and reached no agreement – on how they plan to solve the state’s mounting fiscal problems, other than to say they will hold weekly meetings to discuss the crisis reports the Daily News.

 

“We want to just assure everybody that we’ll be able to pay our bills at the end of the month, and we go step by step after that,” Senate President Pro Tem Don Perata, D-Oakland, said.

 

State officials have worried that the ongoing national credit crisis may make it hard for the state to sell $7 billion in short-term bonds, starting with a $4 million offering next week. The state needs the money to tide it over until it gets a surge in tax revenue next spring.

 

That concern about an inability to borrow prompted Schwarzenegger to write to U.S. Treasury Secretary Henry Paulson last week warning that California may need a $7 billion loan if it can’t get the funds from private lenders in the tight credit market.

 

Revenue for the first quarter of the fiscal year that started July 1 is already down $1.1 billion from the projections in a May estimate, according to state Controller John Chiang. Based on that estimate, the state Treasurer’s Office warned in a lending prospectus Wednesday that the revenue shortfall could grow to $3 billion.

 

Read more here: California Gov. Arnold Schwarzenegger, lawmakers talk finances