The Faculty of Arts and Sciences administration has committed itself to determining its core priorities in preparation for the University’s upcoming capital campaign, FAS Dean Michael D. Smith said at yesterday’s Faculty meeting.

Setting its sights on the future after spending nearly two years focusing on budgetary reform, the Faculty turned its attention to long-term academic goals and to areas that may most benefit from the capital campaign.

University President Drew G. Faust revealed in March that Harvard had begun planning for its next capital campaign after over five years of delays. Harvard’s last campaign, which ended in 2001, raised $2.6 billion ($3.2 billion in today’s dollars).

Smith said that he has begun discussions with the academic deans and will continue to meet with faculty leaders across the school as he prepares a list of FAS priorities that he will present to University President Drew G. Faust at the start of the spring semester.

As central administrators work to determine the priorities for the upcoming capital campaign, FAS will contribute to the process by shaping the University’s fundraising goals, according to Smith. He highlighted priorities for the school over the coming years, including undergraduate financial aid, teaching reform, and House renewal.

Now that FAS has a more positive financial outlook, Smith said that the school can return to its core academic priorities and consider projects such as House renewal, a two-year-old proposal that has since been postponed in the face of financial pressures.

“Our residential house system is the cornerstone of the undergraduate experience here,” Smith said.

Construction remains several years away and will depend upon the funds available, according to Smith. He said that the school will no longer use borrowed money for large-scale projects, as it had in flush years earlier in the decade.

“We have entered a new era in capital planning,” Smith said.

Not only did FAS reduce its budget deficit from $110 to $35 million over the past year, but it finished the previous fiscal year with a $3.6 million surplus in its annual budget.

Smith hailed the sum as a welcome figure: when initially budgeting for the last academic year, he had predicted a $21 million deficit.

Although the surplus is small, “this represents significant effort on the part of Faculty and staff,” Smith said.

Smith—who will publish later this month the annual Dean’s Report that details the school’s savings—credited the improving financial situation to the work of FAS units and donators whose gifts surpassed the school’s fundraising goals.

HARVARD RETIREMENT PLANS

Economics Professor David I. Laibson ’88 concluded yesterday’s meeting with a lecture on reforms concerning the retirement investment options for some 30,000 Harvard employees, including faculty members in FAS.