While Yale has largely addressed the $350 million budget gap caused by the onset of the recession, Provost Peter Salovey said Sunday that the University still lacks a “long-term” plan for sustainable finances.

Though Yale has seen across-the-board budget cuts every year since the recession hit in 2008, Salovey told the News in September that he thought University units would only need to sustain their latest reductions and would “not likely need to make new cuts” in the near future. But Salovey and University President Richard Levin announced in a Wednesday memo to faculty and staff that a disparity between growth in expected spending and revenue will require “targeted reductions” to close a projected $67 million deficit in the 2012-’13 budget.

“We do not yet have a long-term financial plan in which revenue is projected to grow at a pace that not only covers expenditures for current programs but provides funding for growth in some programs and important new initiatives in other areas,” Salovey wrote in a Sunday email. “Nevertheless, we are much closer to a sustainable budget than we were three years ago, even though the economic climate in which we operate continues to be extremely volatile.”

As administrators work with deans, program directors, faculty and staff to trim expenses and locate alternate sources of revenue, Salovey and Levin said the process should avoid University-wide reductions seen in recent years. Salovey clarified in a Sunday email that he believed he was referring to “across-the-board reductions” when he speculated about the possibility of future cuts in September.

Without changes to anticipated spending and revenue levels, next year’s budget gap would amount to between $60 and $70 million, Salovey said. That expected budget gap does not go away in long-term projections, Salovey said, though he added that it is not unusual to anticipate a deficit in the early stages of the budget-planning process. Planning for the 2012-’13 budget will extend into the coming fall.

Spending is expected to grow by 6 percent in the coming academic year, partly driven by the rising costs of utilities and employee health care benefits, according to Wednesday’s memo. But revenue is expected to increase by only 2.6 percent — despite Yale’s strong 21.9 percent return on investments in the most recent fiscal year — because the endowment’s smoothing rule keeps spending relatively consistent on an annual basis.

“We solved most of the $350 million problem caused by the $6.5 billion drop in the value of the endowment,” Salovey said in a Wednesday email. “What we are seeing now is a related but separable challenge going forward.”

Salovey said it is too soon to tell whether units will be able to draw on University reserves — income set aside in rainy day funds — when planning their annual budgets. Though the funds swelled in the years before the financial crisis, Salovey said they have since been depleted “for the most part.” He added that administrators try not to rely on the reserves to balance budgets, preferring to view them as a “cushion” to soften the impact of economic factors beyond Yale’s control.

Salovey, Vice President for Finance and Business Operations Shauna King and Associate Vice President for Business Operations Stephen Murphy met with the heads of all academic and nonacademic units Thursday to begin planning for fiscal year 2013.

Yair Minsky, chair of the Mathematics Department, said in a Sunday email that despite “cautious optimism” he knew before Wednesday’s announcement that it was possible University officials would call for additional budget reductions. The department has lost a few staff positions and now shares its business manager with the Statistics Department as a result of cuts in recent years, Minsky said, and its budget does not have room for additional reductions.

Individual units are required to propose their own balanced budgets, Salovey said, but discussions surrounding the process rarely require units to compete against each other for resources. Instead, administrators consider all major sources of revenue and primary expense categories across the University when devising a budget strategy.

As in years past, Salovey said administrators are working to choose budget trimming strategies that have the lowest impact on academics and student life. The coming year’s budget should also leave room for increases in faculty and staff salaries and wages, according to the memo.

Administrators allotted approximately $2.8 billion for University-wide expenses in the 2010-’11 academic year.