Tax Reductions, Budget Cuts Not as Damaging This Year

Harvard has seen the last of the Reagan revolution's harshest effects. University officials said this week.

After drastic cutbacks in research allocations during the President's first year in office. Reagan failed this year in his efforts to cut further. As a result, the fiscal year 1983 compromise budget which passed last month holds funding constant for most of these programs.

This resolution was only tentative and final figures will not be decided until the appropriations process ends later this summer.

Fears last year that the large tax cuts would discourage donations now have been allayed with Harvard's five-year fund drive continuing at a rapid rate. Officials also predicted that this year's cut effective last week would also have no negative effect.

"Research and development for the basic sciences were treated well in the budget," said Parker L Coddington, director of governmental relations adding that allocations for areas such as physics were almost the same as during the Carter Administration's final year.

Social Sciences Preserved

Money devoted to the social sciences will hold constant at about $200 million, but significantly below the fiscal year 1981 total Coddington, however insisted the slight cuts were essentially a positive sign. "The significant thing is not the numbers," he said. "The Administration has turned around from its previous rehitoric" and decided that the federal government should provide funding for "soft" or social science research.

More comforting to the University has been the negligible impact of the reduction in tax rates on the high-general $350 million Harvard Campaign.

Last summer, after the House and Senate agreed on a series tax measures--a decrease in the maximum individual tax rate an across the board income tax cut and a reduction in the maximum long term capital gains tax rate one University official predicted the package would have a very chilling effect on the fund drive.

The fear was that a lower rate would increase the cost of contributing.

Before the Reagan moves the maximum tax rate was 70 percent donors would thus lose only 30 cents from every dollar given

But when maximum tax levels were lowered to 50 percent, the cost of donations went up proportionally, causing financial officials to worry that giving would decrease.

Laurence B. Lindsey, a researcher at the National Bureau of Economic Research, last summer estimated donations would drop by 25 to 40 percent.

But Thomas M. Reardon, director of University development, said yesterday that the campaign this year has "seen more activity than the prior year." He said that stepped-up soliciting overcame these negative effects. He added that the increased costs were insignificant for those determined to give.

The University, in fact, increased its goal by $100 million this year to offset inflation, to pay for increased faculty salaries and to make up for cuts in student aid. After two-and-a-half years, the campaign has so far brought in $216 million.

Officials, however, are still carefully monitoring the budget process, concerned with possible cuts in funding for astronomy research and health research.

Other Major Concern

Harvard's other current major legislative objective is the prevention of proposed immigration reform, Coddington said. One proposal being considered would force foreign scholars to leave the country after a specific number of years. If enforced, this would seriously hamper Harvard's policy of "hiring the very best people worldwide," he added