This report tabulates state funding for higher education, comparing 1996-97 and 1995-96 appropriations. It reviews recent trends, fiscal pressures, political realities, reallocation, restructuring, and reorganizations. Among the report's conclusions is that current financing constraints are reflections of fundamental changes in the structure of the teaching-learning process. The report finds an increased interrelationship between higher education and the political arena, restructuring of state governing bodies, and increased state legislative mandates and accountability requirements. The report notes the greatest increase in state financial support for higher education since 1990 with 15 states appropriating more than $1 billion to their education systems in 1996-97. Tables cover changes in appropriations for all states over the past 10 years, regional variations, and revenue variations showing the states with high and low revenue capacity and lawmaker willingness to appropriate higher education funds. National tables and comparative measures show actual figures over 4 years, rankings on total state tax effort, a summary of local tax fund appropriations in 26 states, and system tables for multi-campus universities and consolidated systems. A final section gives state-by-state tables of Fiscal Year 97 appropriations for operating expenses for each institution in a state system. (Contains 32 references.) (BF)