The analytical problems faced by gross interstate comparisons of higher education funding are reviewed, the overall usefulness to decision-makers of interstate comparisons, and other approaches to comparative analysis are considered. It is claimed that the usefulness of gross interstate comparisons is limited, since both technical and structural differences among states impair the comparability of the data. Technical issues include: the ways that states finance capital expenditures; the states' handling of employee benefits; the treatment of local taxes and state support for student aid programs; and state policies concerning federal funds and nontax funds. Structural differences among states are also discussed: differences in the maturity and size of higher education systems, the relative size of independent higher education, and the age and socioeconomics of the citizens. The analytical pitfalls of comparing a state's higher education appropriations to per-capita income, interpreting the percentage of state allocations to indicate relative priority of higher education among all state services, and comparing the rate of growth of higher education appropriations over time among states are described. It is advocated that interstate analytical efforts should focus on specific issues where the relevance of data to educational concerns is directly evident and problems of comparability are manageable. (SW)