This paper analyzes the potential implications of ceasing or lowering the funding for developmental studies programs in California community colleges. After an initial discussion of the financial constraints impinging upon community colleges, the possible effects of fiscal reductions on college missions, and the role of developmental education in the two-year college, a course classification system development for California community colleges is presented. This system divides credit courses into one of four categories: baccalaureate oriented or associate-degree applicable; developmental education; community education; and occupational education. This classification system is then applied to 540 credit courses offered at Santa Barbara City College, revealing that 66% of the courses are degree or transfer courses, 30% occupational courses, 2% community education courses, and 2% developmental courses, and that 78% of the courses were transferable to either the University of California or the California State University. Next, the financial implications of eliminating funding for developmental courses and for developmental plus preparatory mathematics courses are assessed to reveal, in the first case, a 1.5% or $172,600 loss of revenue, and in the second case, a 5% or $527,226 loss. The conclusion emphasizes the importance of continuing developmental courses in the community colleges at full funding levels. (HB)