This report synthesizes major themes in local policymaking during the last year, as local school districts continue to grapple with legal and economic constraints on policies that are aimed at creating diverse schools. The report last year on the second anniversary of "Parents Involved" began to uncover some of the consequences of the difficult economic situation facing many local and state governments in terms of budget cuts that affected integration efforts. There are also a number of ways the federal government is influencing districts' policy efforts. As part of the Civil Rights Project's initiative on school integration, the authors have tracked media accounts of school districts' policies that may affect student diversity. While this is not an exhaustive review, this memo summarizes developments in school districts across the country over the last year. They found nearly 600 articles in 39 states. They classify the developments into several categories. First, they review the changing demographics facing districts. Second, they examine the myriad of ways in which the tightening economic climate affects districts' integration efforts. Third, they describe the differing ways in which the federal government is affecting districts' efforts. Fourth, they look at the ways in which communities have mobilized around integration over the last year. Finally, they conclude by describing resources that could be helpful for educators and community members who still seek to further diverse schools. (Contains 1 table and 67 footnotes.)