Budget recommendations for operations and grants for the State of Illinois Board of Higher Education are presented, with policy considerations and statistical tables supporting the recommendations included. The recommendations include: a total increase in state appropriated funds of $133 million, state general revenue fund support increase of $108 million, and universities income fund increase of $19.2 million. For public universities, a total increase of appropriated funds of $84.1 million is recommended, along with the following: an average compensation increase of 10.5 percent for faculty and staff; general cost increase of 8 percent for most goods and services and increases ranging from 16 to 19 percent for utility cost increases; productivity savings of approximately $3.1 million generated through tightened personnel replacement policies and the reallocation of resources; resources for program development totaling $7.7 million; increased support for physical plant maintenance, equipment replacement, and other specific needs; and tuition increases of 10 percent for undergraduate and graduate students in public universities. Specific recommendations are also made regarding the community colleges, the Illinois State Scholarship Commission, private higher education, and other programs. Data on specific institutions within the state are included. Appendices include program and other support recommendations for state colleges and tuition information. (SW)