A recent report by the American Association of University Professors (AAUP) lists Harvard as the highest paying University in the country, but concluded that the year has been difficult for other institutions.

Ronald F. Ehrenberg, a labor economics professor at Cornell University and author of the study, found that salaries of full-time faculty across the country just barely kept pace with the rate of inflation for the 2003-2004 school year.

This year’s 2.1 percent average increase marks the lowest salary raise in 30 years.

Harvard’s average increase, meanwhile, was about 3.5 percent—a figure which has been steadily decreasing over the last few years.

But University President Lawrence H. Summers said that the “modest increase is in line with the fact that America has a modest increase in inflation.”

Major new projects at the Faculty of Arts and Sciences (FAS) such as the Allston campus and the expansion of the sciences have led some professors to predict an even smaller increase in faculty pay for next year.

“My understanding is that we’re going to see salary increases at about 2 percent next year, in part because they’re squeezing hard on the faculty to build Allston,” said Professor of the History of Science Everett I. Mendelsohn. “The big issue at a place like Harvard, which has money, is to what extent is the rate of growth of projects like Allston going to partially stall other areas?”

Mendelsohn said that departmental budgets across campus have been squeezed to curb spending, limiting growth by keeping yearly expenditure increases below 2 percent.

Senior officials involved with FAS finances would not comment on the AAUP’s findings yesterday because the statistics are not specific to the college, but instead consider salaries of all of Harvard’s faculty except those employed at the Medical School.

Meanwhile, Harvard’s average pay for full professors was $157,000 dollars last year, while the national average was only about $100,000.

The data show that Harvard’s professors are paid an average of $30,000 dollars more than their colleagues at University of California-Berkeley, which tops the AAUP’s list of highest paid public institutions.

The AAUP’s annual report, which is based on surveys taken by 1,343 American colleges and universities, stressed that tuition increases could not be fully attributed to expensive faculty salaries.

“Institutions of higher education—both public and private—often claim that rising faculty salaries are among the major causes of persistent increases in tuition,” the report said. “Increases in faculty salary, however, fell far below average rises in tuition and fees, calling this assertion into question.”

The report noted that while tuition and fees rose by an average of 6 percent at private universities and four-year colleges between 2002-03 and 2003-04, this year’s survey revealed that the average salaries of professors at those same schools rose by significantly less than that.

According to the report, private institutions were hit the hardest with financial aid obligations, which have become increasingly costly as the national unemployment rate continues to climb.