After introducing the financial dilemmas which community colleges face, this paper states the approaches generally advocated for sound community college financing: negotiated budget under full state support, unit rate formulas, minimum foundation funding, and cost-based funding. Criteria related to those principles include: (1) consistency with community college goals, (2) policy perogative of the local authority, (3) objectivity of formula data, (4) protection of the minimum level of quality, (5) administrative budget flexibility, (6) equity and equalization, and (7) accountability to state and locality. Reports of current practices in several states, and some of their strengths and weaknesses are presented; and a more systematic approach to evaluating a state's funding method is proposed. Besides considering the country at large, the paper devotes special attention to Pennsylvania to provide greater specificity and illustration. A survey of Pennsylvania community college presidents indicates a belief that the state's present system of funding is inadequate, and should be improved through increased support for non-resident students, for new colleges and nation- and region-wide programs, for occupational programs in health and engineering, and for minimum foundation levels of educational quality. (MB)