This annual address by the Chancellor of the Los Angeles Community College District (LACCD) focuses on the financial crisis affecting the district and on the district's innovative activities and programs. Opening remarks review the recent actions of the governor and legislature which resulted in the maintenance of the community colleges' tuition-free status, but also in a $108 million cut in their funding base. Next, changes in community college policies and their impact on educational access are examined. Problems due to budget reductions are then described in terms of specific decreases in institutional and student support services of the past 2 years. The following sections describe innovative programs and other noteworthy LACCD activities, including Project ACCESS, a program designed to improve the transfer function; a national study on the redefinition of the associate degree; cooperative programs with industry; the LACCD's self-supporting community services programs; and international education programs. After the district's long-range planning activities are examined, the paper concludes with comments focusing on the ability of the LACCD to survive the current fiscal crisis and eventually rebuild its programs. (LAL)