This document contains the budget recommendations for Illinois public community colleges and the Illinois Community College Board for fiscal year (FY) 1978, reviews the funding history and problems of Illinois community colleges and provides a statement of need for the FY 1978 budget request totalling $132,196,218. This figure compares to the FY 1977 budget appropriation of $108,802,000, although $117,111,500 had been recommended by the Illinois Community College Board. It is noted that in the three-year period of FY 1974-1977, state credit-hour grant support per student has decreased more than 8% while inflation has increased by nearly 25%. Consequently, the bulk of the recommended increase over the 1977 budget is for credit-hour grants, with a rate of $20.80 recommended as the base rate for the average credit-hour grant. This budget recommendation is intended to prevent further program closures, tuition increases, and deterioration of educational quality. Tabular and graphic data are included throughout and provide information on: state appropriations by budget item and apportionment rates FY 1966-1977; anticipated revenues by source and per credit hour for FY 1978; unit costs by college and instructional program area for FY 1976; annual apportionment FTE enrollment by funding category for FY 1976; assessed valuations and estimated tax collection losses; and equalization funding. Overall, costs for operation of the Illinois community colleges for FY 1978 are projected at $299,675,000 for 185,500 FTE students at $53.85 per credit hour. (JDS)