When Dean Ford released his annual Faculty budget report last month, the figures told a familiar story. Although the Faculty finished the 1968-69 year with a small over-all profit, Ford warned that a harder financial year was ahead, with a predicted deficit of nearly $1.9 million in the 1969-70 budget.
If this year's budget follows the pattern set in the last few years, that prediction will prove to be far too pessimistic. Because Ford is intentionally liberal in estimating expenses and conservative in figuring income, each year's budget looks better in June than it did when predicted in the Fall.
Last Fall, for example, Ford predicted a mammoth $2.4 million deficit in 1968-69.
By the end of the year, the loss had turned into a modest over-all surplus of $400,000. Every indication is that this year's predicted deficit will also be cut when the actual figures are totaled.
No Boost Expected
But there may be serious trouble in repeating last year's performance and turning the deficit into a surplus. Much of last year's recovery was due to a large and unexpected distribution of endowment income-a boost that will not be repeated this year.
Both income and expenses will be up this year, but expenses may rise by about twice as much as income. Ford predicts total expenses of $40.7 million this year-more than twice the figure ten years ago and an 11 per cent rise over last year's $36.9 million.
By far the largest chunk of the expense rise is in salaries for Corporation appointees. The $1.6 million rise-from $13.9 million last year to $15.5 million this year-comes both from increased pay rates and a larger teaching staff.
One other expense item shows a major rise: student aid (excluding loans) will go up $900,000, from $5.7 million last year to $6.6 million this year.
The predicted budget shows several other expense areas either holding steady or rising very slightly:
wages and pension costs for employees will go up $200,000 from $3.6 million to $3.8 million;
Harvard College Library expenses will also rise by $200,000 from $1.5 million to $1.7 million;
building improvements, building maintenance, athletic programs, and a series of other items are virtually the same as last year.
To offset these expenses, Ford's predictions show only a $1.5 million rise in income-from $37.3 million last year to $38.8 this year.
Nearly all the change in the income column comes from two items-tuition and endowment. Tuition funds will be up by more than $2.5 million-from $14.2 million to $16.7 million-but an expected $900,000 drop in endowment income-from $11.3 million to $10.4 million-will eliminate much of the gain.
Overhead payments for research contracts will be about the same as last year. In terms of past performance, however, that leveling-off represents a drop in Faculty income. Until last year's cutback on government research, overhead payments had been steadily rising by at least ten per cent annually.
The most disturbing item in the new budget is the $1.5 million deficit predicted in the "unrestricted income" figure. The total Faculty budget is made of three subtotals: unrestricted income, restricted endowment income, and gifts for special purposes. Money in the last two categories is earmarked for special expenses such as endowed chairs; it cannot be used to make up shortages in general operating costs, which all fall into the "unrestricted" category.