This study examined the attitudes of state education policymakers and campus representatives in regard to performance funding and budgeting in public higher education. A mailed survey of 916 state education policymakers, campus administrators, deans, and faculty senate chairs in nine states was conducted in December 1996, and a follow-up telephone survey of state higher education finance officers (SHEFOs) in all 50 states, Puerto Rico, and the District of Columbia, which sought to differentiate performance funding from performance budgeting, was conducted in April 1997. The former survey found a preference for state higher education budgets driven by current costs, improved results of higher education institutions, and enrollment levels; all groups except state education policymakers considered that external accountability was the main purpose of performance funding. The telephone survey found that 10 states currently had performance funding for public colleges and universities. Eighteen SHEFOs from states without performance funding indicated that it was likely that their states would adopt such a program in the next five years. Eight states reported currently having performance budgeting for public higher education, and 18 of the respondents indicated that it was likely that their states and the District of Columbia would institute performance budgeting over the next 5 years. (MDM)