Faculty's Budget Registers Surplus

The Faculty spent $167,000 less than it took in for the 1979-80 academic year, registering its fourth consecutive surplus despite steady inflation.

But because receipts from the Harvard Campaign earmarked for last year's Faculty budget did not meet expectations, the Faculty borrowed $1.7 million from the Corporation to avoid a large deficit, Melissa D. Gerrity, assistant dean of the Faculty for financial affairs, said last week.

Calling the surplus a "contrived figure" because of the loan, Gerrity said the Faculty received only $1.4 million of the $3.7 million it anticipated from the fund drive this year.

If that Campaign money had arrived as expected, the surplus might have run more than $700,000, she added.

Jane E. Barry, budget analyst in the office of budgets, said last week the Faculty will repay the Corporation after the Campaign funds come in. "Everybody agrees that there's a reasonable expectation that the money will come--it's a smoothing kind of thing the Corporation is trying to do now," she added.

In addition to the loan, unexpectedly high receipts from tuition payments and government grants bolstered the income side of the balance sheet, Gerrity said, adding that rapidly rising energy costs accounted for the biggest surprise in the expense column.

The extra income from tuition resulted from a large Class of '83 and a high number of students returning from leaves last year--not unnecessarily high tuition, Gerrity said.

But she added that the Faculty anticipates the four-year surplus trend to end because escalating energy costs and other inflationary problems will eclipse any future income surprises. The 1980-81 budget includes a $785,000 deficit, she said.

"It's scarily close to the $1-million, $1.5-million deficits of the early '70s, in spite of the 13.2-per-cent tuition increase," Gerrity said. She added that the energy budget for this year jumped by 52.6 per cent.

Even though deficits hurt the budget and distress the Corporation, Gerrity said she believes next year's budget might help the Faculty in the long run. "Tiny surpluses may hinder you because the Faculty thinks everything fine," she said.

Dean Rosovsky said yesterday he did not submit a 1980-81 deficit budget as a tactical device to draw attention to financial difficulties. "Obviously we can't live with that level of deficit for a long time," he said, adding, "I think this coming year is going to be very difficult."

Close, But...

The Faculty came close to balancing the 1980-81 budget last January, but energy hikes since then created a large deficit, Robert E. Kaufmann '62, former associate dean of the Faculty for finance and administration, said yesterday. 9be the equivalent of a $14 million program in this country. The Canadian program gives direct subsidies to thousands of low and middle income homeowners to help them slash their fuel bills. The American program of tax incentives benefits only the rich. To take a tax credit, you have to spend money first. Of the less then 10 per cent of Americans who claimed tax credits for conservations purposes, more than 75 per cent were above the median national income, according to government statistics. President Carter's proposal in his economic recovery program for $975 million to weatherize lower and middle income homes is the right step, but it is a drop in the bucket. While the billions spent on synfuels and fusion are not benefitting anyone, a program of home insulation could provide direct and immediate relief for the poor. Such a program would also create thousands of jobs in the faltering home building and construction industries.

The government should split its strategy, giving insulation subsidies to the poor and increasing tax incentives for those above median income. In addition, the Congress should act swiftly to adopt Senator Malcolm Wallop's (R-Wyo.) bill that would increase industrial tax credits for the installation of energy-efficient equipment from 10 to 30 per cent. While they're at it, Congress should also pass the Building Energy Efficiency Performance Standards Act, shelved last year because of enforcement difficulties. The bill would coordinate six federal agencies in the regulation of the building and housing industries.

CONSERVATION MAY make sense, but many people still consider it un-American--including the Republican Party. Americans are used to spending and consuming, not tightening their belts, and Congress has balked at any attempts to place a tax on gasoline in order to reduce consumption. Last spring Yergin proposed a gasoline tax that, no matter how politically impractical, is simpler and more effective than John Anderson's. Yergin proposed a tax that would reach $1 a gallon in five years, with direct rebates to purchasers. According to Yergin's statistics, that would reduce national gasoline consumption by 25 per cent.

Aside from conservation, the government should continue to explore alternative sources that don't pollute and won't provoke community opposition. Some experts believe that hydroelectric power could, with significant technological advances, undergo a renaissance in the Northeast. Solar energy is also in need of research funds. Photovoltaics, the direct conversion of the sun's rays into electricity, is a promising but so far commercially unfeasible technology. Current solar technologies are also valuable, but they require very specific types of construction and building materials. With government tax incentives, however, a solar house does not have to cost any more than a non-solar one, and can save anywhere from 50 to 90 per cent on an average-sized home's energy consumption.

Solar energy, however, is still thought of as the energy source of visionaries and flakes. While synfuels and fusion are celebrated, solar is scoffed at and insulation programs are considered as afterthoughts. This winter there are millions of Americans who could benefit from national insulation and solar development programs. Instead the only ones who will benefit from the national energy policy are the corporations and scientists in the fields of synfuel and fusion

The government should split its strategy, giving insulation subsidies to the poor and increasing tax incentives for those above median income. In addition, the Congress should act swiftly to adopt Senator Malcolm Wallop's (R-Wyo.) bill that would increase industrial tax credits for the installation of energy-efficient equipment from 10 to 30 per cent. While they're at it, Congress should also pass the Building Energy Efficiency Performance Standards Act, shelved last year because of enforcement difficulties. The bill would coordinate six federal agencies in the regulation of the building and housing industries.

CONSERVATION MAY make sense, but many people still consider it un-American--including the Republican Party. Americans are used to spending and consuming, not tightening their belts, and Congress has balked at any attempts to place a tax on gasoline in order to reduce consumption. Last spring Yergin proposed a gasoline tax that, no matter how politically impractical, is simpler and more effective than John Anderson's. Yergin proposed a tax that would reach $1 a gallon in five years, with direct rebates to purchasers. According to Yergin's statistics, that would reduce national gasoline consumption by 25 per cent.

Aside from conservation, the government should continue to explore alternative sources that don't pollute and won't provoke community opposition. Some experts believe that hydroelectric power could, with significant technological advances, undergo a renaissance in the Northeast. Solar energy is also in need of research funds. Photovoltaics, the direct conversion of the sun's rays into electricity, is a promising but so far commercially unfeasible technology. Current solar technologies are also valuable, but they require very specific types of construction and building materials. With government tax incentives, however, a solar house does not have to cost any more than a non-solar one, and can save anywhere from 50 to 90 per cent on an average-sized home's energy consumption.

Solar energy, however, is still thought of as the energy source of visionaries and flakes. While synfuels and fusion are celebrated, solar is scoffed at and insulation programs are considered as afterthoughts. This winter there are millions of Americans who could benefit from national insulation and solar development programs. Instead the only ones who will benefit from the national energy policy are the corporations and scientists in the fields of synfuel and fusion