The history of Illinois community college operating finance policy is traced from July 1964 with the establishment of a semester hour flat rate grant (FRG) through the following: an equalization formula in addition to the FRG; supplemental non-business occupational grants; supplemental appropriations during a sudden enrollment increase; recommendations of a governor-appointed committee; enrollment growth funding; and division of the FRG into "basic" credit and "special basic" (disadvantaged student) funding rates. This is followed by a discussion of resource requirements vs. revenue, recent state funding problems, and proposed funding changes developed by an Ad Hoc Committee of community college representatives, with major differences juxtaposed for 1978 and 1979. A rationale for funding changes is followed by the assumptions used to calculate funding needs, the proposed l979 state community college budget, a revenue/cost illustration, and the board's central office budget in narrative and statistical form. Instructional unit costs by funding categories and full-time equivalent enrollments, college assessed valuations, tax rates, tuition and fee revenue, tax collection loss rates, proposed budget design refinements, grant proposals and projects, the data processing budget, and personal and contractual services budgets are appended. (RT)