Administrators' proposal to tax 10 percent of carry-forward funds could result in unnecessary spending and cripple departments already running low on resources, department heads said last week.

The concerns come in response to President Peter Likins' 17 budget reallocation proposals, revealed two weeks ago, which would centralize the university budget and save money in a time when the UA is facing a decrease in state funding and rising operational costs.

One proposal would impose a 10 percent tax on carry-forward funds - leftover money in departments at the end of the fiscal year - and move the monies to central administration.

However, the idea hit a sour note with departments, who say they are already "woefully under-funded."

Mike Hammond, head of the linguistics department, said although he understands the university is in a difficult financial situation, the linguistics department does not have unused funds sitting around for a rainy day.

"My own position is that that sort of tax is a very bad idea," Hammond said in an e-mail. "The problem is that to the extent we ever have carry-forward, it is extremely small and budgeted for specific expenses in the coming year. I would strongly encourage a different mechanism to deal with the current financial situation."

Provost George Davis argued UA administrators have "never touched" carry- forwards in the past, and now only want to tax vacancy saving derived from local and state dollars.

But J. Christopher Maloney, head of the philosophy department, said a tax on carry- forward funds would "very seriously hobble" his department's capacity to teach and conduct research.

Maloney also pointed out the tax would discourage prudent financial management if departments have money leftover in June and suspect administrators will take 10 percent.

"What would you do if you were a department head with, say, $1,000 in an account in mid-June?" asked Maloney. "Would you buy that computer that the department has long needed and thereby empty the account and avoid the tax, or would you try to squeeze one more year out of that old computer that needs to be replaced and watch your $1,000 wither under a tax?"

Likins said he understands departments may spend at sub-optimal levels if they think administrators will tax 10 percent of their money.

He said he can relate to their situation because when he was a professor at the University of California, Los Angeles, administrators would take money rather than tax it, and Likins said his department would try to spend it before administration took it.

However, Likins said if departments deny flow to central administration, administrators will have to get the money in some other way, possibly a 1 percent budget cut instead of the proposed 1/2 percent cut.

Another problem with the tax is not every department has similar funds that carry forward, since many departments rely on revenue from summer session to sustain the budget, said Jim Shockey, associate dean for instruction in the College of Social and Behavioral Sciences.

"It's complicated for every college," Shockey said. "A 10 percent tax on one might be a nuisance, on another it might be critical."

In the veterinary science and microbiology department, the recent budget cuts are resulting in lower quality labs and less course choices for students due to a lack of instructors, said Jim Collins, department head.

Collins said while a half-percent budget cut may not seem like much on the surface, the actual cut in operations feels like 20 percent because departments can only cut from certain areas while others, such as tenure faculty salary, cannot be cut.

Shockey said since about five percent of department budgets are flexible, if administrators continue to impose cuts, departments will have to fire people.

But Likins said with the 17 budget reallocation proposals, administrators are trying to spread out the cuts "rather than putting all our eggs in one basket."

Still, department heads said the taxes and cuts are leaving them frustrated.

"Taxation is a very blunt instrument when the problems call for the precision of a laser," said Maloney.