This report examines the effects of 3 successive years of tight state budgets, rising student fees, layoffs of part-time instructors, and reduced class offerings on the ability of California community colleges to meet constituent needs. Drawing from interviews with college administrators, faculty members, state officials, and educational authorities as well as reviews of state reports and other students, the report presents information on the negative effects of aggressive marketing and recruiting; differences in the outlooks of state and college officials; college funding and the state master plan; the core of educational access; origins and analysis of the community colleges' enrollment decline; the impact of financial aid; students lost of higher costs and reduced course offerings; perceptions of students attending for personal interest; college funding; where cuts have been made; cutting unfunded enrollment; cutbacks to build reserves; neglect of equipment and maintenance. Specific findings include the following: (1) over the last 2 academic years, enrollment declined nearly 10% from 1,531,900 to 1,376,300, with about 140,000 potential students indicating that they were unable to pay the higher fees or were turned away because of eliminated classes; (2) the colleges received a funding increase of 0.5%, while the consumer price index climbed about 9%; (3) during the 1993-94 academic year, colleges were expecting a 2% funding increase but received a 0.5% cut; (4) colleges were underfunded by at least $300 billion (about 11% of state support); (5) about 14,000 (11%) course offerings were eliminated; (6) at least 2,800 (9%) part-time faculty were laid off; (7) attempts to increase financial aid have had limited success in offsetting higher fees; and (8) colleges' educational quality has fallen as class size increased, student transfers have dropped, liberal arts and vocational education courses have been cut back, and maintenance of instructional equipment has been curtailed. Contains 18 references. (MAB)