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Faculty Budget: Good and Very, Very Bad

Officials Say University Has Amassed $52 Million Deficit From Employee Benefits Spending

When figures on the shortfall were distributed to the Faculty Council Wednesday, the reactions of members ranged from concern to amazement.

"$52 million is a huge amount of money," said Kahn Associate Professor of the History of Science Anne Harrington. "It was amazing to see the payroll benefits broken down like that."

"I was alarmed to see the amount of money we put into things that are invisible to most of us," Harrington added.

Professor of Chinese History Peter K. Bol said his reaction to the data was one of "profound concern."

While the University lost $66.4 million on employee benefits over the last four years, a reserve of $14.2 million from 1989 limited the actual shortfall to $52.2 million, according to a table produced by Director of Finance and Accounting Judith B. Warren.

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In Warren's presentation to the Faculty Council, she said the University normally recovers the costs of employee benefits by charging the schools and departments a fringe benefit rate applied to all salaries. Until recently, she said, these assessments covered the University's benefits bills.

According to a statement from Acting Vice President for Government, Community & Public Affairs Jane H. Corlette, benefits costs have increased by an average of 15 percent per year over the last five years.

Harvard has drawn from its reserves to pay some of those costs rather than burden the schools and departments with the added expense, Corlette continued.

The shortfall is especially costly because the Corporation money could be used for other purposes, such as slowing tuition increases or raising faculty salaries, Fox said.

"My understanding is that the more we spend on benefits, the less money we have to spend on educational programs and on faculty and students," said Professor of Sociology Theda Skocpol.

Faculty Council members said they will await a report from the Green task force before considering potential solutions to the deficit problem.

"My sense was that this was presented to the Faculty Council with the idea of preparing us to review solutions when they are presented," said Assistant Professor of the Classics Cynthia Damon.

Despite her willingness to wait for a report from the task force, Damon said that "the problem is in urgent need of solution."

Exactly how the University will find that solution is itself a matter of contention, however.

Some members of the Harvard community are claiming that they are being excluded from a process whose outcome could directly affect their lives.

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