The Faculty of Arts and Science is facing a record $2 million deficit on its $54 million budget this year that could lead to cutbacks in the size of the Faculty.

The Faculty lost $1.4 million during the 1973-74 academic year, more than half a million dollars over the deficit Dean Rosovksy predicted in the Faculty budget last November.

Skyrocketing Inflation

Rosovsky has not yet made up a final budget for Faculty approval, but he cited the $2 million figure last week in a meeting of the Faculty Council, a legislative subcommittee of the Faculty.

The deficit, caused by skyrocketing inflation rates, will lead to a tuition increase of at least $200 for next year, Robert E. Kaufmann '62, assistant dean of the Faculty for financial affairs, said Friday.

"The financial situation is going from bad to worse," Rosovsky said earlier this month. "No institution is less well fitted to living with inflation than a private university."

The Faculty pays for its deficits out of a bank account it established during the sixties when it was accumulating surpluses, but at present deficit rates the account will be exhausted in three years and the Faculty will have to cover its losses by borrowing money from the Harvard Corporation and paying it back later with interest.

Kaufmann said he and Rosovsky have "looked at the possible benefits of a 2 per cent drop in the Faculty's personnel" because salaries make up the largest single portion--almost half--of the Faculty's expenses.

Earlier this week Rosovsky termed a reduction in the size of the Faculty "likely," but said such a reduction would not mean firing any of the professors, teaching fellows or secretaries whose salaries come out of the Faculty budget.

Rosovsky also ruled out cuts in Faculty salaries, now the fifth highest in the United States, and said that any cutbacks in Faculty size would not be across the board but would vary according to departmental need.

Kaufmann said that if there were no new hires in the Faculty this year, normal retirements and contract expirations would lead to a substantial decrease in the size of the Faculty by next June.

Other Options

Other options for reducing Faculty spending, Kaufmann said, include:

*Finding ways to use the annual surplus from the Faculty's $12 million a year income in restricted funds;

*Asking Harvard's other faculties to pay for Faculty of Arts and Sciences classes and facilities their students use; and,

* Cutting back on "little things" like copying costs, telephone bills and traveling expenses.

The Faculty's restricted funds can generally be used only for a purpose specified by their donors, usually endowed professorships or scholarships, and the Faculty usually has about a $1 million surplus from its restricted income every year.

Kaufmann said he and Rosovsky are considering using the surplus to pay for central administrative costs.