Although the governor’s economic forecast leads with the gloomy statement that “Higher energy prices . . . will slow economic growth,” Governor Schwarzenegger’s “May Revise” budget contains no funding increases for either renewable or traditional energy infrastructure that might reduce projected power costs. The budget released May 12 does contain an extra $2.85 million for the California Public Utilities Commission. However, that increase is earmarked for telecommunications – not energy. The governor’s revision does allocate another half million dollars to reducing greenhouse gases. This is in addition to the proposed $7.2 million to slow global warming proposed in Schwarzenegger’s earlier budget blueprint. The governor’s economic outlook for the state notes that energy prices pushed up inflation. “Despite higher energy costs,” however, it added that this year’s economy “continued to expand solidly.” An unexpected flood of tax revenue will be spent largely on schools and paying down debt, according to Schwarzenegger. If the Legislature approves the revision, the governor’s office expects the operating deficit for the state to drop to $2.5 billion, down from a projected $16.5 billion two years ago.