In this article, the author reports the ripple effects of the energy squeeze due to Hurricane Katrina and other factors that sent energy costs skyrocketing. Energy costs are a good part of why budget growth, which has been steady over the past five years, has been slowing down. The projected change from FY2005 to FY2006 is only 3.3%, compared to 5% in the previous report. Also, the projected change in materials budgets is 2.3%, compared to 4.7% in last year's report. Still, per capita funding has nudged upwards, to a projected $37.26 in FY2006. The author describes how libraries face challenges and demographic changes and presents a fiscal snapshot of how public libraries expect to fare nationwide. (Contains 3 tables.)