Drawing from the literature on the financing of community colleges, this paper discusses problems associated with state community college funding and examines the relationships that arise between the state, local community college districts, and students when each is an important source of revenue to the community college. In the first section, issues related to intergovernmental fiscal policy, the development of systems of community college financing, and the currect status of state finance systems are reviewed. Next, problems in the funding of community colleges are highlighted, including the isolation of community college funding from the funding of other educational institutions in many states; lower levels of state support for community colleges compared to other postsecondary institutions; the inequity that arises when appropriations to colleges are derived from local property taxes; and the fact that tuitions can vary more widely among community college districts than median family incomes. The next section presents an empirical analysis of community college finance in Illinois for 1975-76, which concentrates on the question of the equity of basing the distribution of state aid to community colleges on the wealth of the local district. Finally, the policy issues of integrating state and federal support to community colleges, levels of student contributions to college costs, and appropriate levels of local support are discussed. (HB)