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.

This study summarizes and analyzes the findings of a statewide survey conducted last year of samples of homeless individuals in the Phoenix and Tucson areas and across the state. The aim of this report is to join with other, ongoing efforts to develop effective policies concerning such issues as job training, treatment for the mentally ill and Arizona’s critical need for affordable housing. Hopefully, it will help politicians and policymakers talk more openly and productively about a pervasive social problem that is both glaringly obvious and largely invisible.

This report brings together the results of a survey of 1100 homeless people living in and around downtown Phoenix in 1996 with the results of a similar survey conducted in 1983. In addition to providing a snapshot of the homeless population in Phoenix, the data and comparative information presented in this report also reveal the complex and intractable nature of the homeless problem in general.

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.