Reference departments in academic libraries, especially those in state-assisted colleges and universities, are currently in a dilemma. They are eager to make use of the opportunities for enhanced and expanded service that CD-ROM technology offers. They are also finding it difficult, if not impossible, to locate the necessary funds within the small or no-growth budgets they receive from the parent institution, especially given the still-increasing cost and proliferation of more “traditional” reference sources. This difficulty can be placed within the broader context of the problems inherent in public higher education and its relationship to state funding and allocations. Although no one solution will be appropriate for local consideration, options for short-term funding include the following: funds direct from the library director, the provost (or other chief academic officer), the Friends group, special interest groups or grants, as well as multiple scenarios for reallocation of internal funds. These will be discussed both pro and con as well as the crucial and necessary issue of securing permanent funding for CD-ROM services. Our best hope for the future may be for higher education to seek cooperation instead of competition with education (K-12) when pursuing state funding.