Yale’s budget for next fiscal year will be the largest in University history and the sixth consecutive balanced budget.

The Yale Corporation approved a $1.54 billion operating budget and a $361 million capital budget for fiscal year 2003, which begins July 1, at the body’s meeting this weekend.

Last year’s operating budget was $1.4 billion, with a capital budget of $324 million.

The 2003 budget includes major financial aid improvements for undergraduate and graduate students. The new undergraduate financial aid plan will reduce the average financial aid student’s expected contribution by $3,445 a year.

There were also substantial increases in funding for Academic Media and Technology and faculty members’ salaries.

“What pleases me about the ’03 budget is that we have stayed really focused on the priorities on the capital and operating fronts,” said Provost Alison Richard, Yale’s chief academic and financial officer. “It’s an aggressive budget, and it represents major investments. They are investments where we set out to make them. I’m really pleased we’ve been able to stay disciplined.”

Richard said this year’s budget was slightly more difficult to balance because of initiatives, such as the financial aid plan, that the University committed to during fiscal year 2002.

“We made a number of aggressive decisions earlier in the year which left us with a tighter situation in the spring,” Richard said.

The University was able to save money in the 2003 budget by managing its utility costs more effectively, Richard said. Last year, there was a substantial increase in utilities after the 2001 budget underestimated utility costs by $7 million.

The operating budget, however, did see an increase in interest and amortization costs. This expenditure reflects the amount of debt Yale is taking on to finance capital projects. Although Richard said she is comfortable with the increase this year, she said she will monitor it closely.

“It’s something we need to watch carefully,” Richard said. “I don’t want to see too much of the operating budget locked into amortization payment. You don’t want interest to grow to be too high. It leaves you with insufficient flexibility.”

Much of the capital budget will go to supporting renovations on the Yale School of Medicine, including the new Congress Avenue building.

“They have run out of space, and they need space to grow in,” Richard said. “That is a big piece of the capital budget.”

Richard estimated that medical school improvements accounted for just under one-third of the capital budget.

For the last few years, the Corporation has not approved the budget until its June meeting, but Richard said she prefers April approval.

“In principle, I believe it’s better to have it approved by April so it’s not at the 11th hour,” Richard said. “I had been unhappy in the series of years where we had not brought forth until June.”

Richard added that greater familiarity with the University’s accounting program, Oracle, streamlined the budget process this year.