Harvard's largest school halves projected budget shortfall, dean says

Despite those figures, Smith said the FAS still needs to fundamentally rethink how it undertakes its work, its structure, and its activities to determine what is critical.

The Faculty of Arts and Sciences, the largest of Harvard's 10 schools, had grown significantly in recent years -- both in size and ambition. Since 2005, it has added 60 faculty members and 230 staff positions, enabling Harvard to start several new programs.

It built nearly a million square feet of new space, funded by debt instead of donations. And it started an ambitious plan to help middle- and upper-income families afford skyrocketing tuition costs.

The school has already planned $75 million worth of cuts though layoffs, voluntary early retirements, and other reductions -- and projects a $20 million deficit this fiscal year.

The improved short-term financial picture, however, will allow the FAS more time to come up with thoughtful and creative long-term solutions, Neal said. In addition to the six faculty and student committees formed last spring to help identify further large-scale cuts and reshape how the FAS functions, Smith announced the creation of a new on-line ideas bank for Harvard community members to submit and debate other ideas.

"Key intellectual and pedagogical priorities will continue to move forward as the budget resolution process also continues," Neal said.

Harvard has taken a series of budget-cutting measures amid a recession that has battered the university's endowment and that of most other schools. Earlier this month, Harvard Management Co. said the school’s endowment was down to $26 billion on June 30, compared to $37 billion a year earlier.