New York State's 36 community colleges have operated under serious financial constraints since the beginning of the last recession in 1990, which diminished state funding and induced program cuts and higher tuition. New York's community college system was established based on a funding model of one-third each by State aid, local support, and tuition revenues, but the State has dropped its share below one-third since 1992, causing tuition revenues to exceed its one-third share. Tuition and fees at New York community colleges now average nearly $2,600, exceeding the national average ($1,500) by nearly 70%. Following an executive summary and recommendations offered for consideration in budget planning, this report discusses the following issues: (1) community college role and structure, including its history as a cost-effective point of access; (2) funding, specifically state, local, and student support; tuition levels; Hope scholarships; and capital development; (3) governance, with a focus on budget setting and the lack of priority often accorded to the community colleges by the State University of New York system board; (4) workforce development, including skills upgrading and retention, employer-specific skills training, community colleges as economic development agencies, and the Workforce Investment Act of 1997; and (5) opportunities for change. Appended are 1997-98 actual net costs and revenues for SUNY community colleges. (AS)