California community colleges are expected to provide a broad range of affordable educational opportunities to an increasing number of students, but the current system does not have sufficient funding to serve them all well. This report describes present budgetary sources and explains that colleges receive mostly discretionary funding. With the University of California and California State University systems contemplating significant reductions in 2009-2010 enrollment, more students planning to attain a bachelor's degree are expected to enroll in state community colleges next year, even as state revenues are projected to drop further. State policy makers will face difficult choices as they allocate already-scarce resources and attempt to support the community college system that is one of California's largest and most cost-effective educational institutions. (Contains 2 figures.)