This monograph is concerned with the issues and problems raised by recent trends in state legislative activity related to community and junior colleges and in patterns of funding these institutions. The first of two parts discusses legislation directly or indirectly affecting policies for financing postsecondary education in general and community colleges in particular. This legislation forecasts a period of financial stringency, which is a product of decreased state appropriation growth rates, restrictions on institutional growth, and increased outside control over expenditures. The second part discusses the changing policy frameworks and decision-making environment, which are characterized by a variety of different groups gaining a greater voice in internal institutional affairs. This may affect the speed and manner in which community colleges can change, thus impairing their ability to develop validly needed programs and to use resources efficiently and effectively. The report concludes with a discussion of six issues: the relationship between educational policy control and financial support provisions; the protection of institutional flexibility; the tendency of state legislatures to be restrictive; the acquisition and use of information for coordination and planning; the proper role of the federal government in funding; and a growing sense of consumerism. (Author/TR)