This year, the Faculty of Arts and Sciences (FAS) will receive a smaller payout from the University’s endowment than it might have expected given the steady growth throughout the 1990s. Since this payout regularly funds nearly half of the College’s spending needs, it should come as no surprise that FAS is headed for budget deficits in the near future, as Dean of the Faculty William C. Kirby’s public letter stated last week.
While FAS has not run serious budget deficits since the early 1990s, in light of today’s souring economy, red ink is no shock. FAS should not fear running modest deficits in continuing its expansion—nor should it rule out borrowing to cover its expenses for a few years. The Faculty should be able spend smoothly through the economy’s upswings and downswings—a desirable practice for a college looking to grow.
Since 1999, the Faculty has grown from 603 to 641 professors, and Kirby should continue with his plan to expand the Faculty by another 10 percent over the next 10 years. Ongoing projects, such as the ambitious renovations of Widener Library and the Science Center, need to be continued. Future projects that serve the greater University community, such as the renovation of the Malkin Athletic Center, deserve serious budgetary consideration as well. It is foolish in the long run to stop renovations and postpone projects indefinitely just because the economy is weak right now. Running deficits for a few years is preferred, so long as the debts are reasonable and can be repaid in more prosperous times. In fact, FAS is currently carrying a $308 million debt, which hasn’t harmed the operations of the College.
The University’s deep pockets can, and should, ease the burden on FAS. To do so, however, Harvard will have to show generosity when it distributes funds from the endowment. University President Lawrence H. Summers should lobby the Harvard Corporation to grant larger increases in the endowment’s payout to FAS for the coming years. As Kirby has pointed out in his letter to the Faculty, if “we say ritually, that Harvard College is at the heart of the University, we must work continuously to make that statement true.” Harvard’s world-famous College will remain vital only as long as it receives the money it needs.
Still, FAS should take this opportunity to take a critical look at its operations. In tough financial times, penny-pinching is necessary. Other major universities are facing financial crises, and in order to avoid the drastic measures taken at those schools, Kirby should carefully root out waste and make prudent cuts where they are appropriate.
It is still unclear when and where such cost cutting will occur. The process by which Kirby and the rest of the Faculty determine which programs and projects are unnecessary must be transparent and free from political infighting. Openness is the surest way to guarantee that we spend our money wisely during the current slump.