The California Postsecondary Education Commission adopted the following six priorities for the state budget for higher education during fiscal year 1989-90: (1) expanding funding for adult education programs in English as a second language and basic skills; (2) supporting enrollment growth in California's public universities; (3) implementing community college reforms mandated in recent state legislation; (4) expanding student financial assistance; (5) maintaining low fees for students in public higher education; and (6) funding capital outlay for needed construction, renovation, and repairs. These six priorities are based on existing Commission policy. For each priority, the issue, its context and conditions, and a specific recommendation are outlined. The recommended staff actions involve working with the Legislature, state Department of Finance, and the legislative analyst's office to secure adequate funding for all six priority areas. (MSE)