Developed to assist two-year college administrators in understanding the application of the funding formula for California's community colleges that became effective July 1, 1991, this paper reviews revenue base limits; practical implications of the revenue base; the role of institutional growth in increasing base revenues in the absence of cost of living adjustments (COLAs); rates for program based funding; determination of revenue generated by a specific class; and restrictions on the local allocation of money. Highlighted in the paper are the following facts: (1) for 1991-92, a college which did not decline in enrollments in 1990-91 is guaranteed a revenue base limit which is the equivalent of what it received for the average daily attendance (ADA) generated in 1990-91; (2) the actual revenue base for 1991-92 is generated by credit and non-credit full-time equivalents (FTEs), head count of new credit students and continuing credit students, square footage owned or leased 100%, and FTEs in other leased space; (3) an institution can make up a loss of credit FTEs and enrollment through non-credit FTEs; (4) the new growth cap is computed in terms of a dollar cap for each district; (5) rates developed for program based funding are funded at 58.56% of the calculated rate because of insufficient state support; and (6) aside from requirements for spending a percentage of growth funds on full-time faculty, there is no restriction on how money is to be spent locally. A rate table for program based funding and sample calculations for determining the revenue for credit and non-credit classes are included. (PAA)