The University's proposed operating budget for its 1996-97 fiscal year estimates spending of $1.023 billion, an amount that is expected to exceed operating revenues by $4 million. The projected deficit figure is half the previous year's deficit of $8 million, and would keep Yale on the course it has charted toward a balanced operating budget next year.
The University's finance officials stated that the spending plan would enable Yale to reaffirm its position of excellence in the challenging and rapidly changing world of higher education, and noted that the process that produced the budget called upon the accumulated experience and creativity of faculty and administrators throughout the University.
The resources in the 1996-97 operating budget will allow the University to continue to recruit and retain world-class faculty, "its most valuable asset"; fund ambitious systems initiatives including the replacement of the University's core financial and human resources systems; and augment the commitment to fund an increased share of capital maintenance with operating revenue, finance officials said. The University has embarked on a 10-year effort to raise spending on capital maintenance in the operating budget to $50 million annually. The budget also funds the University's initiatives contributing to the economic development, human development and neighborhood revitalization of New Haven. Those initiatives include the Homebuyer Program.
Among the major revenue sources for the operating budget are grants and contracts, 27 percent of the budget's revenues; tuition, room and board, 24 percent; medical services income, 17 percent; and spending from the endowment, 16 percent. Finance officials noted that University income from the endowment and gifts remains strong.
Approximately 60 percent of the University's operating revenues is devoted to faculty and staff compensation, which includes fringe benefits. Ten percent of total resources, totaling $107 million, will be used for financial aid. Thirty percent of the financial aid will allow Yale College to continue its commitment to needs-blind admissions and full-need financial aid.
The University's proposed 1996-97 capital budget, funded primarily through debt and gifts, estimates $227 million in new project authorizations and $173 million in actual disbursements over the course of the fiscal year. Important components of the capital budget are renovations of Yale's residential colleges, Sterling Memorial Library, Payne Whitney Gymnasium, and the University's power plants. Approximately $60 million will be used for Central capital maintenance, including about $7 million from University operating funds.