The decision to defer facilities maintenance obligations in California higher education and the extent to which maintenance has been deferred are discussed. Attention is also directed to the educational and fiscal context in which this decision has been made nationally. The policies and procedures governing facilities maintenance and deferral in California's three segments of public higher education are examined. In addition, current efforts to resolve problems stemming from deferral and their potential impact in light of the likely future of higher education in California are addressed. The University of California has taken a decentralized approach to facilities maintenance, allowing each campus to develop its own administrative and procedural framework and resolve its problems within broad policy and budgetary guidelines. In contrast, the State University is implementing a comprehensive systemwide program of facilities maintenance management. The challenge set by the facilities maintenance dilemma can be traced to three causes: insufficient funding, diversion of funding to other priorities, and inadequate maintenance procedures. Four possible sources of funds to support deferred maintenance are identified, along with procedures that are needed (e.g., preventive maintenance programs and accountability procedures). (SW)