Although funding for the arts in New York State reached unprecedented levels during the 1980s, funding for organizations which have distinct ethnic bases and purposes has not kept pace with funding for Eurocentric arts expressions. Data were gathered from a public hearing in New York City attended by more than 100 artists, administrators, cultural workers, and concerned community persons of color, and from an analysis of a 5-year funding history of 57 ethnic cultural institutions receiving support from the New York State Council on the Arts (NYSCA). Many NYSCA funding biases appear to be caused by a tendency to make subjective judgments of art, concepts, and organizations based on European modeled objectives. Programs represented by communities or persons of color are either not funded or are grossly underfunded. The following recommendations are suggested: (1) create a stabilization fund for minority arts programs; (2) establish a panel to manage the stabilization fund; (3) revise funding guidelines to include a culturally diverse perspective; and (4) allocate 50 percent of all state funding to people of color. The appendices comprise the following: (1) statements by Native American, Asian American, Latino, and African American task force members; (2) a statistical supplement discussing methodology and significant statistical findings; (3) a list of members of the New York State Black and Puerto Rican Legislative Caucus; (4) a list of nine references; and (5) two editorials from New York City newspapers discussing discrimination in funding arts programs. (FMW)