The Faculty of Arts and Sciences has reduced its deficit to $80 million, signifying a drop that FAS Dean Michael D. Smith credited at yesterday’s Faculty meeting to alumni donations, improvements in the international financial market, and last year’s cost-cutting measures.

At an open forum last September, Smith said that FAS would seek to reduce its deficit to $90 million for the fiscal year ending in 2010—a planned decrease of $20 million that the administration has exceeded by $10 million, according to its most recent estimates.

“I am actually very pleased,” Smith said yesterday. “Several times I had to ask Leslie [A. Kirwan ’79, FAS Dean for Administration and Finance], ‘Really?’”

Despite the good news, Smith said that much remains to be done to close the remaining $80 million deficit—an obstacle he called “huge”—and that the strategy for making cuts will be “relatively unchanged” from last year.

Last July, a new legislation passed in Massachusetts permitted Harvard to tap into its most recently endowed funds, which had fallen in value to less than the amount bequeathed by the donor and are considered “underwater.” Though the law’s passage arrived too late to help in last year’s budgeting process, Smith said FAS may tap into those funds this year.

In addition, University President Drew G. Faust said at yesterday’s meeting that a new capital campaign was on the horizon for the University, which has not had one in over a decade—“an eternity” for a school of higher education, she said.

Capital campaigns tend to have an initial “quiet phase,” during which the University assesses its fundraising opportunities and the types of gifts it may expect, according to Faust.

“In this environment, we need to be particularly sensitive because our donors were hit, as were we,” Faust said.

Though FAS departments and administrative units were urged last year to budget for a 15 percent decrease in expenditure, they will not be asked this year to cut their budgets by a certain percentage, according to Smith. Instead, the units will work with the administration to make strategic cuts—in acknowledgement of the consideration that some places have less fat left to trim than others.

In a lengthy PowerPoint presentation, Smith credited the generation of a myriad of budgetary recommendations to the six FAS working groups created last May and the Idea Bank Web site, to which 275 individuals have submitted suggestions.

Among the ideas posted—none of which have yet been approved but will see further discussion—were renting out the Student Organization Center at Hilles during the summer, admitting more Master’s students, and leasing some of the University’s space in Allston.

Smith also announced that the Registrar’s office will undergo a thorough IT redesign in coming years to ensure the alignment of its technical capabilities with FAS’ academic offerings. The site does not currently have the capacity to cross-list courses, according to Smith.

NEW NAME FOR DEPARTMENT

The Faculty voted yesterday to change the name of the Department of Literature and Comparative Literature into the Department of Comparative Literature.

Department Chair David N. Damrosch said that the department—as well as the Faculty Council—unanimously approved the name change. The current name “seems to all of us on the faculty to represent a kind of transitional phase in the merging of these two programs,” Damrosch said in an interview.