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Price Guideline Question Still Troubles FAS

By Mark D. Director

The effects of President Carter's wage and price guidelines on the 1979-80 Faculty of Arts and Sciences budget are still not clear--a situation that is now causing difficulties for administrators who are attempting to formulate the Faculty's new budget.

Earlier this fall, officials in Washington and around the University had said they expected Harvard would be forced to comply with the federal guidelines.

However, Robert E. Kaufmann '62, associate dean of the Faculty for finance and administration, said yesterday the indications from Washington now seem to reflect that the government "has no intention of forcing charitable or educational institutions into strict compliance" with the guidelines.

"But it is not at all clear yet," Kaufmann added. "We just are not getting very clear signals from Washington."

One source of uncertainty is that the guidelines allow institutions different means of meeting the standards for price increases.

The government asks that businesses keep their price increases to .5 per cent less than the average price increase over the last two years. But the guidelines also say that businesses unable to meet such a restriction would still be considered "in compliance" if they do not increase their profit margins as a result of a price increase.

Non-Profit

Robert H. Scott, director of financial systems, said yesterday that universities, as non-profit groups, would probably be allowed to comply with the alternate provision.

"It's sort of a strange situation for a university," Scott said. "We're discussing with Washington exactly what they have in mind, but I think it'll still be a while before we have everything sorted out."

A spokesman for the Council on Wage and Price Stability in Washington also said yesterday that the issues of university prices are still unclear.

Kaufmann and other Harvard administrators have indicated that if a close restraint were imposed on University tuition, the Faculty might have to make numerous budget cuts--including some substantial ones.

However, Kaufmann said no specific cuts have yet been discussed, because it it not yet clear if Washington will closely limit fee increases.

If Harvard were limited to the strict numerical guideline proposed in the federal program, the 1979-80 tuition increase might be limited to $400.

However, Kaufmann said, "it is quite possible that we could be allowed to set fees to 'balance the budget.'" He added that achieving such a balance would require a fee increase exceeding the range outlined by the guidelines. He added, however, that he doubts the federal government would permit an increase that would allow for a budget surplus.

"We just don't know yet whether we will have some constraints or have complete flexibility," he said.

Kaufmann and other University officials said they felt the government would be tougher on wage guidelines, keeping Harvard close to the 7-per-cent ceiling outlined in Carter's program

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