Gov. Arnold Schwarzenegger’s revised budget forecast reflects his belief that the state’s economy has largely withstood the ravages of the housing slump, the Sacramento Bee reports.

At least one prominent California economist says Schwarzenegger is being overly optimistic. But other analysts said the new forecasts are in the ballpark.

The governor’s annual May revision, released Monday, suggests a slight slowdown in tax revenue in the upcoming fiscal year when compared with his original proposal in January.

But the revised $103.8 billion budget still predicts growth in tax revenue over the current fiscal year, which ends June 30. “California’s economy continues to be very sound,” Schwarzenegger said at an afternoon news conference.

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