This document describes a crisis in enrollment, funding, and governance that occurred in the Los Angeles Community College District (LACCD) between 1981 and 1987. Following introductory materials, chapter 1 reviews the history of the LACCD and the effect of funding reductions caused by 1978's Proposition 13. The next two chapters review the beginnings of the crisis from 1981 to 1983 and the continuance of the crisis from 1983 to 1985, highlighting the effects on District colleges and employees of state funding cuts, enrollment fluctuations, controversy over the appointment of a new vice chancellor, and controversial salary cuts and layoffs. Chapter 4 discusses the climax of the crisis from 1985 to 1986, highlighting three evaluations that were undertaken of District finances and management, a controversial decision to layoff 147 faculty, and the decision to replace two District college presidents. The next chapter explains how the crisis subsided in 1986-87, describing improvements in enrollment and finances, the attainment of a balanced budget and reversal of previous deficits, and sweeping changes in the Board of Trustees. Chapter 6 reviews the changes in staffing, funding, programs, recruitment, and institutional planning during the crisis years of 1985 to 1987, while chapter 7 addresses the impact of the crisis from 1987 to 1989, including the resignation of the District Chancellor, and ongoing problems from 1989 to 1996. Contains 468 references. (HAA)