Concentrating on states' needs for programs offered by institutions of higher education (IHE) and the manner in which these needs can be met and financed, the 3-part paper analyzes the elements included by "The Chronicle of Higher Education" in its ranking of states' suppoort of higher education based on the results of the Chambers Report and suggests the best single method to rank the states for comparative purposes. Part I provides an introduction to the topic. Part II discusses the ability to support higher education with attention to tax ability, base for comparison, capital outlay, tax and nontax income, public only versus public and private institutions, state only versus state and local support, and supplementary information. Part III compares and analyzes rankings and concludes, among other things, that it does make a difference in ranking when local government revenue for IHE is included along with state government revenue. A table and end notes are included. (TRS)