Budgeting for instructional equipment at California's public colleges and universities is considered. Information is provided on how the University of California and the California State University budget the replacement of existing instructional equipment as well as instructional equipment in new or altered facilities. Methods used by the community colleges for budgeting instructional equipment in existing or new/altered facilities are also covered. Observations are offered regarding the appropriateness of support and capital outlay portions of the state's budget for the two types of equipment funds, as well as the use of other state and extramural funds. Conclusions and recommendations of the California Postsecondary Education Commission are offered on the methods and funds for instructional equipment budgeting in California public higher education. Appendices include: equipment price indices, University of California policy on gifts-in-kind, California State University Preliminary Report on Instructional Equipment Replacement, University of California Policy Guidelines for Requesting State Capital Outlay Funds to Equip New or Altered Space, and California Community College Guidelines for Instructional Equipment Purchases from State Allocation. (SW)