Not only that but the MPAA only counts what member studios actually put into a film's budget -- something known as total negative cost. Often there are other cost associated with the production of a film that never make it into the actual budget, Consequently, the total negative cost of many studio films could be even higher than reported. Plus, as the article states, the MPAA also doesn't count money used by production companies that are not member studios so that isn't figured in their statistics either.
With all the hoopla about cutting star salaries -- including Tom Cruise being ousted from Paramount -- and trimming costs its a little hard to believe that movie production spending actually increased in 2006. Sure, things happen but at some point you can't cry about high prices and still spend more than you did the year before. After all, the money has to come from somewhere. One gigantic hit like Pirates of the Caribbean; Dead Man's Chest doesn't really justify all the the money wasted on films like Eragon, Date Movie or The Black Dahlia, does it? Maybe the studios think it does.