Based on data of public higher education institutions in the State of California of US from 2004 to 2013，this paper focus on the variation among institutions in terms of their perstudent appropriation from state government for education and general operation and examines the determinants of the variation.We find that，in addition to the macro environment of the state and the operating costs of institutions，individual institutions classification and quality are also the determinants of the variation.Particularly，our results indicate that appropriations for education and general operations are correlated with institutions nonteaching characteristics，such as research quality.It is therefore suggested that higher education institutions costs and contributions to the economy should be considered simultaneously when Chinese governments allocate the basic expenditure appropriations to the institutions，and in addition to the equity criterion，criteria such as costeffectiveness and quality should be imbedded in the appropriation mechanism as well.