The Faculty has a good chance of achieving the balanced budget targeted for the current fiscal year, Dean Rosovsky said in his annual budget letter released yesterday.

The $1 million deficit expected in last year's budget was reduced to $214,000 through successful cost-cutting measures, increases in giving to the College Fund and in government contracts, he said.

The letter pointed out several vulnerable areas in the Faculty budget, including its reliance on a further increase in alumni donations and probable rises in building maintenance and miscellaneous costs, and suggests that the Faculty must continue to cut spending more.

But Rosovsky suggests that if the Faculty can continue to monitor costs and achieve balance or a modest surplus this year, its energy "recently focused on cutting expenses, can be turned to the task of redeploying our resources more effectively."

Areas that might require more funds in the next year include faculty salaries, which he suggested are not always competitive with those of other institutions; the libraries, which he said may not be as efficient as they should be; and what he called "allied institutions" such as the Division of Engineering and Applied Physics, whose present connections with the College may be impractical.

Finally, Rosovsky suggests the College's review of undergraduate education is likely to have financial implications that must be considered in future budgetary policies.

The Instructional Fund--an account the Faculty uses to cover its deficits--has shrunk to an all-time low, with a current value of $4.8 million. In 1962, this fund was worth about $12.6 million.

Rosovsky warned in his letter that the Faculty must begin rebuilding this fund through balanced budgets or face losing what he calls the Faculty's "financial cushion for the future."

Robert E. Kaufmann '62, assistant dean for financial affairs, yesterday summed up the sense of the budget letter, saying the Faculty is "not rebuilding our strength, but at least we're not bleeding to death."

Kaufmann said he expects there will be some increase in undergraduate tuition, but said he will not have exact figures until mid-January