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.

This report presents the second comprehensive look at the conditions of children and families in Arizona. Building upon information presented in the 1992 Factbook, this document presents and analyzes 48 indicators of child well-being. Following the executive summary and tables, chapter 1 provides an overview of the data for the state as a whole, including a summary of key findings and tables depicting raw numbers, rates adjusted for population growth, and rate changes over time. Racial and ethnic breakdowns are presented when such data are available.

Chapters 2-16 offer individual county profiles, following the general format established in the state chapter. These chapters offer insights into regional variations and identify varying conditions for children across the state. The report charts data within the state and county chapters for each of the following six categories: (1) poverty; (2) child health and safety; (3) child abuse, neglect, and out-of-home care; (4) early care and education; (5) children in school; and (6) teens at-risk. Overall, findings reveal significant improvements for a few indicators since 1990, most notably within birth-related items, such as an increase in the percent of women receiving timely prenatal care and a decrease in low birth-weight births. Findings also suggest there has been a worsening for many indicators, including poverty, firearm-related deaths and hospitalizations, alleged child abuse incidents, and births to teens.