The war on poverty during the 1960s succeeded, cutting the national poverty rate in half by the early 1970s. Since then, however, the poverty rate of Americans under the age of 65 has increased. The poverty rate has climbed particularly among children; compared to an average of 15.5 percent during the 1971-to-1975 economic cycle, the poverty rate in each of the three cycles since 1982 averaged between 18 percent and 21 percent. One-in-five children lives in poverty and Arizona has consistently experienced higher poverty rates than the national average for all age groups except seniors.

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.

The U.S. Census Bureau’s most recent report shows Arizona has the second highest poverty rate in the nation. This shameful distinction calls attention to a long-standing social problem that has been exacerbated by challenging economic times. In this edition of Policy Points, authors Richard C. Knopf and Brian Simpson examine the increasing demand for emergency food assistance, hunger's impact on children, and the growing number of Arizonans experiencing need for the first time.

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.