This report summarizes the findings and recommendations of the Iowa Community College Funding Formula Task Force. The first section contains a list of guiding principles of state aid to the community colleges. These include: providing Iowa citizens with access to educational opportunities and services; having a balance of state aid, local property taxes, and tuition; providing for an equitable distribution of state aid; assuring predictability; supporting the uniqueness of individual colleges; being sensitive to the cost of instruction, the number of students enrolled, and unique student needs; accommodating new missions; incorporating the needs of the system, as well as the individual institutions; supporting state-mandated programs; and basing schools on a data collection and reporting system with uniform, audited data elements. The next section provides background information on Iowa's system of community colleges, focusing on its history, students, services, and finances. The funding study process and recommendations follow, as well as the fiscal year 1999 appropriations request. Funding issues and future actions are also addressed. Appendices include: funding sources; general fund refinements; programmatic and student enrollment reporting changes; 1997 education funding for Iowa students and inmates; average undergraduate tuition and fees; and average in-state tuition for public community colleges for 1995-96. (YKH)