Recession Hits Universities Hard
Yale Is Proposing Drastic Cuts to Trim Its Budget. But FAS Members Say Such Steps Are Unlikely Here.
Times are tough for everyone this year in recession-ridden New England, and academia is no exception.
Feeling the crunch of depreciating investments and falling government funding, many schools are resorting to cost-cutting measures that range from minor--delaying maintenance and canceling book purchases--to drastic--eliminating faculty positions and even entire departments.
Last month, a committee at Yale University recommended that the school cut a minimum of 114 faculty positions by attrition over the next 10 years. Such cuts would reduce the size of the faculty by 10.7 percent.
The committee suggested that two departments, linguistics and operations research, be closed, along with a social policies research center. In addition, it recommended sharp cuts for the engineering, physics and sociology departments.
Such cost-saving measures are intended to bridge the New Haven school's projected budget gap of $8.8 million. Though it has an endowment of $2.5 billion, Yale is facing both a decline in major sources of income and the possibility of having to return millions of dollars in federal money after audits of allegedly improper use of research funds.
Harvard's Faculty of Arts and Sciences (FAS) is feeling many of the same pressures, according to Dean of the Faculty Jeremy R. Knowles, with a projected deficit of nearly $12 million in a budget of approximately $1 billion.
Caution and Hope
But at Harvard, the mood seems to be one of caution and hope. While Harvard does not have a budget review committee like the one at Yale, Knowles says the Faculty is acutely aware of the need to bridge the budget gap.
"We're analyzing the situation," the dean says. "I'm very concerned...that we look hard at what we do, because we probably will have to trim ourselves."
Harvard faculty have already felt the effects of cuts, although none as deep as Yale is proposing. In 1990, then-acting FAS Dean Henry Rosovsky froze nonessential administrative hires, reduced the number of administrators and staff, and decreased departmental budgets by six percent.
Knowles is currently writing a letter to the Faculty about its financial situation. He is discussing the letter, which should be sent within the next several weeks, with President Neil L. Rudenstine.
Harvard faculty members, including those in the departments of linguistics and sociology, insist that the University's situation is different from Yale's, and that there is little immediate fear of cuts as major as those at Yale.
Professor of Sociology Theda Skocpol, a member of the Faculty Council, says Harvard's deficit is smaller in proportion to its overall budget than Yale's.
"The feeling is that the situation is a serious one, but not dire," she says. "The perception seems to be that with...wise judgements we can overcome our budget problems."
"I don't think the situation is as grave as it is at Yale," she says.
Skocpol says that to her knowledge, the council has not yet made any discussion of cuts similar to those at Yale. Members are investigating other possible ways of cutting costs, she says, including attempts to move current Harvard personnel to other positions when posts open.
"I think we all know we have to trim expenses, in all departments, across the board," the sociology professor says. "I haven't noticed any panic."
And Skocpol says members of the Sociology Department are not worried about their positions going the way of their Yale counterparts.
"I don't think that the sociology department is concerned that it will be shrunk," she says.
Despite the possibilities for their colleagues at Yale, members of the Linguistic Department here, says Professor of Linguistics Susumo Kuno, do not think that their department is in danger.
"I'm not concerned about that," he says. "The elimination of a department of linguistics will turn a major university into something like a liberal arts college."
Kuno says that fellow faculty members "have a much better understanding of linguisitics and the role it can play" than at Yale. He calls the proposal to cut Yale's department "very unfortunate."
"I think this is disgraceful," he says. "If they accept the recommendations, they will be extremely shortsighted."
Kuno said that he and other linguists are concerned that Yale's department was not given a fair assessment. Those who made the recommendations, he says, had little knowledge of the field.
"I'm sure that concerned linguists will write to Yale protesting recommendations of the committee," he says.
South Asian Program First Victim?
One discipline, however, that may have exhausted its last defense against the recession is the study of Hindu-Urdu languages.
A professorship and associate professorship of Indo-Muslim culture in the Department of Near Middle Eastern Languages and Civilizations have until now been sustained by a private trust fund.
When Professor of Indo-Muslim Culture Annemarie Schimmel retires at the end of this academic year, Harvard will cease drawing from this fund, leaving the department without these two professors if another source of income is not found.
Schimmel and Associate Professor of Indo-Muslim Culture Ali S. Asani are the only professors at the University who teach courses specifically on South Asian Islamic culture and civilization. In addition, Schimmel teaches Persian and Turkish while Asani is the only scholar who teaches Hindi and Urdu.
If both professors were to leave, Harvard would be forced to discontinue between 30 and 35 courses, officials say.
Other Ways Out
Faculty cuts are by no means the be-all and end-all to reducing deficits, officials say. Rosovsky proposed five possible sources of expenditure decreases in the 1990-91 Annual Dean's Report, although he added that any of these solutions might be worse than the problem. Only one of these possibilities involves faculty positions.
Rosovsky, who is Geyser University Professor, said that in order to make drastic cuts and meet budgetary goals, the University must accept that the "standard of excellence would have to be sharply revised downwards."
The five possible sources include postponing salary increases for senior faculty, which could save Harvard up to $3 million per year; slowing the pace of laboratory renovations by rationing new appointments, which could eliminate up to $300,000 per year in debt service; and capping increases in library costs to the rate of inflation, which could save up to $380,000 per year.
His other suggestions for possible money-saving measures included reducing or abandoning Harvard's need-based financial aid policy, which could save the University up to $10 million, and deferring maintenance costs, which if reduced by 20 percent could save $1.8 million.
Another source of revenue, which has been suggested more and more frequently, is the possibility of spending part of the endowment. Officials are wary of this option, however, citing long-term losses.
Yale Deputy Provost Charles H. Long says that such a solution is brought up "at least eight or ten times a day" at Yale, but that he does not support a plan that would sacrifice the future strength of the endowment for the sake of paying day-to-day costs.
"There's no question that taking money out of the endowment for operating expenses is disastrous," says Long. Spending endowment funds for facility maintenance and capital improvements is somewhat less dangerous, but the Yale deputy provost warns against that also.
As for Harvard, the University is expected to report next month that its multi-billion dollar endowment grew at a disappointing rate in fiscal year 1990-91, making it difficult to justify removing funds from the endowment, University officials says.
Officials have attributed the endowment's weak performance to significant losses in Harvard's riskiest investment fund, the high-profile Aeneas Group. The fund includes holdings in real estate, oil and gas, and venture capital.
While discussions are further along at Yale than they are here at Harvard, the recommendations of the Yale committee are not yet set in stone, says Long. The cuts are currently being discussed among the faculty.
If made, the changes will be somewhat reversible, he says. Should the recommended sharp cuts to the engineering, physics and sociology departments take place, a reserve of funds will be made available to those departments when they become stronger and begin to attract more students.
Long says that though the proposed shortfall is just over one percent of the university's total expense budget--$799 million next year--it is much larger in relation to the $265 million of the budget which is actually flexible. Most of the university's funds, he says, are tied up in fixed areas such as grants and contracts. Thus the budget shortfall becomes "much larger...with respect to the difficulty of fixing it," he says.
While Yale does not calculate an actual arts and sciences budget each year, its faculty of arts and sciences makes up "a pretty big chunk" of the university's budget, Long says. And since salaries and department expenses are among those most easily manipulated, the arts and sciences budget must compensate for a significant portion of the $8.8 million shortfall.
Whatever methods higher education administrators settle on to compensate for financial losses, academics bemoan the toll that the recession threatens to take on many universities' faculties and programs. They say they realize, however, that in times such as these, some hard decisions must be made.
Stanford linguistics Chair William Leben called Yale's propsal to eliminate their linguistics department a "big mistake."
"It has a modern relevance and it's very interesting discipline...it's just a shame to a good university like Yale," he says.
Stanford, too, is feeling the crunch of the recession. The Palo Alto, Calif. school has a budget deficit of approximately $50 million.
"Everyone realizes that something has to be cut out," Leben says. "No one has the impression that we were doing extra things before that don't have to be done."