The Guastello-Zollar funding formula provides a foundation of state financial support to community colleges based on a "fair share partnership" concept of funding and a program of investment/incentive grants awarded to encourage colleges to implement programs which have high priority in Michigan's educational policy goals. The fair share partnership is based on state aid revenue as a percentage of total General Fund revenues for community colleges in 1976-77 (the prior fiscal year) resulting in a state share of 44%, local tax share of 22.6%, student tuition share of 26.4%, and miscellaneous revenue support of 7.0%. The formula equalizes state share based on average expenditures per student; equalizes local tax share based on regional ability to pay; and provides tuition relief when both tuition and local effort equals or exceeds state averages. The seven investment/incentive grants which may be awarded are: (1) Program Completion Grants, which are based on the number of degrees awarded; (2) Career Education Grants, which are based on commerce degrees and technical certificates; (3) Service Area Grants, which aid remotely located schools; (4) Remedial Program Grants, which encourage remedial education; (5) Target Training Grants, which promote special occupational skill training; (6) Student Counseling Grants, which encourage career planning; and (7) Prison Program Grants, which provide postsecondary education to inmates. Funding formulas are provided. (DR)