Public finance—taxes and other revenues collected by government and the expenditure of those revenues—always has been somewhat controversial because of wide philosophical differences among residents regarding the role that government should play in providing public services and in collecting taxes and fees from its residents. Recently, public finance in Arizona has become a prominent public issue due to the need to resolve the deficits that afflict state government and most county and municipal governments in Arizona.

Arizona is emerging from one of the worst state budget crises in the nation. Entering 2003, its projected deficit, measured as a percentage of the general fund, was the fifth largest in the country.1 The state had slashed spending in 2002 in the face of a $900 million deficit, but still faced a $400 million shortfall for fiscal year 2003 and an estimated $1 billion deficit in fiscal 2004. Although improved revenues have reduced the anticipated gap, fundamental underlying problems remain concerning the ability of lawmakers to control the budget. Some observers consider this a revenue problem, others a spending problem. Our concern in this paper is whether state lawmakers have enough control over either revenue or spending.

With so much new school reform activity within the United States centering on charter schools, a fresh appraisal of the situation is in order. This briefing summarizes the history of charter school laws and updates their current status across the country. Although this is not intended to be a comprehensive review, several charter school research projects are described: some that have revealed lessons learned in the implementation of charter school laws, and others, more national in scope, that were designed to systematically describe existing charter schools and document their impacts.