Harvard's faculty to cut budget by 19% in two years

Harvard University’s Faculty of Arts and Sciences, the teaching body for most undergraduate classes at Harvard College, will slice $220 million from its budget over the next two years because of endowment losses.

The faculty will form six working groups composed of teachers, staff and students to help determine which programs to trim because of the 19 per cent cut, said Michael Smith, Dean of the Faculty of Arts and Sciences, in a talk with teachers and staff yesterday. The faculty, which also includes Harvard’s engineering, continuing education and graduate arts and sciences units, has a budget of about $1.15 billion.

Investment losses that are expected to slash the value of Harvard University’s endowment by 30 percent are demanding that cuts be made in the school’s academic programs, Smith said. The working groups will be charged with finding ways to make those reductions, he said.

The working groups aren’t being formed “to squeeze more efficiencies out of the system,” Smith said in a talk on the school’s campus in Cambridge, Massachusetts. “We have to get running with this, in the right direction, which is to reshape the Faculty of Arts and Sciences.”

Building programs, new hiring, and an expanded financial aid program have all added new costs at the school, Smith said. “These are things we don’t want to go backward on,” he said.

Working groups
The school’s endowment was the biggest academic fund in the world at $36.9 billion in June. The Faculty of Arts and Sciences has cut $4 million from its budget this year, and has developed plans to cut another $73 million in the coming fiscal year that begins July 1, Smith said.

The working groups must determine how to cut an additional $143 million from the faculty’s budget in the following year to avoid recurring deficits, he said.

Harvard is the top-ranked university in the US, followed by Princeton University in Princeton, New Jersey, and Yale University, in New Haven, Connecticut, according to US News and World Report. Harvard and other schools across the country are cutting budgets in the biggest recession since World War II.

The Faculty of Arts and Sciences has the largest endowment of Harvard’s units, valued at about $17 billion in June. The endowment contributed about $650 million to the faculty’s operating budget this year, about half its total, Smith said.

Last month, the school said operating budgets will get about 8 per cent less from its endowment in the next fiscal year, starting July 1, than in the current year. The arts and sciences faculty is now planning for the endowment’s contribution to drop about an additional 12 per cent in the 2010-2011 fiscal year, to about $525 million, Smith said.

Salary freeze
The Faculty of Arts and Sciences, with about 1,100 faculty and 3,500 staffers, already has said it will freeze salaries, and has offered some staff early retirement. About two-fifths of those staff are union members, said Robert Mitchell, a faculty spokesman, in a telephone interview after the meeting.

Of the unit’s 521 eligible staff members who were offered the package, 153 have accepted, Smith said. Teachers aren’t eligible for the programme.

Some custodial workers employed by companies that have contracts with Harvard have already been cut, said Paul Nauert, a member of the student group. The proposed working groups should also include custodial employees, he said.

‘Severe Inequity’
“The workers must be thought of and visible in these conversations,” Nauert said in an interview after Smith’s presentation. “There’s severe inequality between the lowest- paid workers and the highest-paid.”

Nauert, a Harvard senior, said his group has asked for a meeting with university president Drew Faust by April 30, and for Smith to hold a meeting with the student body to discuss budget cuts.

Members of Harvard’s Undergraduate Council said they were concerned about the prospect of cuts in the staff of the college’s houses, which are both residential and social units at the school.

“The houses are what make Harvard, Harvard,” said Eric Hysen, a sophomore representative on the council who lives in Mather House.