This document presents the final recommendations and background papers of a task force empowered by the Michigan legislature to consider the mission and roles of the state community colleges, alternative funding modes, and the responsibilities and interrelationships of the state and local governing boards. Following an overview of recommendations and summaries of the reports of subcommittees in the three areas, the bulk of the document consists of a detailed explication of the recommended funding model and the report of the subcommittee on state-local relations, presented in appendices. The funding model is based on a 50/50 division of responsibility between the state and local districts, including that for leisure-time courses, and is a criterion-based model intended to equalize local tax bases and economies of scale. The model is presented in two sections: "The Determination of Gross General Fund Investment Needs" and "A Method for the Allocation of State Funds Based on the Determination Needs Model." Measurement criteria, methodology, formulae, and sample applications of the model are provided. The state and local relations committee report presents an historical perspective, a discussion of areas of concern identified through a survey of community college presidents, an analysis of involvement patterns in the state policy decision-making process, outlines the state/local division of governance responsibility, weighs the advantages and disadvantages of centralized versus autonomous systems of governance, and concludes that the state should remain sensitive to the need for institutional autonomy and that a more democratic, less bureaucratic system of statewide governance is needed. The survey instrument and definitions of terms are included. (BB)