This document presents fiscal year 2003 budget recommendations for Illinois higher education operations, grants, and capital improvements. For operations and grants, general funds of $2,789.2 million are recommended, an increase of $100 million, or 3.7%. New funds are targeted to address the six goals of "The Illinois Commitment: Partnerships, Opportunities, and Excellence" with a focus on improving learning at all levels, enhancing the competitiveness of faulty and staff salaries, maintaining affordability, and meeting statutory funding requirements for the State Universities Retirement System. Capital improvement projects totaling $443.7 million are recommended, focusing on projects to protect the state's investment in existing facilities and ensuring adequate facilities to training, instruction, and research. Chapter 1 contains an executive summary, and chapter 2 discusses implementing "The Illinois Commitment," the state's educational reform initiative. Chapters 3 through 8 outline the operations and grants budgets for institutions and agencies. Chapters 9 through 12 describe capital improvements projects. An appendix presents related higher education data. (Contains 49 tables.) (SLD)