For 10 years the Public School Forum has conducted an annual study of local school finance in North Carolina. The results of the 1997 study are presented in this report. It is intended to enable policymakers and the public at large to compare communities' ability and relative effort to provide financial support for their public schools. The report includes a discussion of the changing nature of the school-finance debate, a look at the school-finance picture across the nation, a review of the school-finance lawsuit still before the North Carolina Supreme Court, and a list of major issues confronting the state. The major finding is that the ability to provide quality educational programs is not distributed uniformly across the state. Namely, the gap in property wealth among North Carolina's 100 counties continues to grow; the state's poorest counties continue to take on a greater tax burden; the impact of welfare mandates still disproportionately affects poorer counties; there is increased disparity in total local expenditures between rich and poor counties; low-wealth supplemental funding helped close spending gaps, but only slightly; and a significant discrepancy exists between the best and worst performing counties. (Contains 2 appendixes and 5 tables.) (RJM)