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Library Funding

Library Funding by Mary Lou Zanich

 

 THE INDIANA FREE LIBRARY – A Brief Review of Finances

 Background

In 1907, the New Century Club of Indiana, PA, opened a “Reading Room,” which would eventually become the Indiana Free Library (IFL). In 1934, the Library moved to its current location in the Community Building, a building which is the property of Indiana Borough, deeded over from the YMCA to be used for the community when it was not able to maintain the building. In 1961, the Commonwealth of Pennsylvania passed The Library Code, which governs (with Title 22 of the Pennsylvania Code, Chapters 131-143), the establishment, operation, and maintenance of public libraries in Pennsylvania.

 “Public” and “Free”

Under Pennsylvania’s Library Code, Indiana Free Library is considered a “local library.” §102.1 of the Code defines a “local library” as:

                 Any free, public, nonsectarian library, whether established and maintained by a municipality by a private association, corporation or group, which serves the informational, educational andrecreational needs of all the residents of the area for which its governing body is responsible, byproviding free access (including free lending and reference services) to an organized andcurrently useful collection of printed items and other materials and to the services of a stafftrained to recognize and provide for these needs.

 

  The governing body of the Indiana Free Library is its Board of Trustees. The geographic area for which the Board is responsible is essentially that of the Indiana Area School District and includes the residents of Armstrong Township, Indiana Borough, Shelocta Borough, and White Township. All residents within these communities have free access to library collections and professional staff services. Non-resident patrons may still use the library as a “reading room,” but access to services, including free lending, requires that non-resident patrons pay a fee (currently $25/family/annum).

  The official 2010 Federal Census indicates that the Indiana Free Library service area has a population of 32,924, an increase of 778 people over the 2000 Census. This equates to an additional $3890. of spending with no increase in government income. Population figures are important in the determination of state funding, required levels of staffing, hours of operation, etc. While basic library services are provided to these resident patrons without charge, such services do not come without cost. Expenses for the 2011 calendar year are summarized in the chart below; the categories which appear are those included in a required, annual report to the State.

   As is the case with most human service organizations, the majority of library expenses are related to all of the costs associated with personnel. The number of full-time equivalent (FTE) staff positions at a local library is mandated by Title 22 of the Pennsylvania Code and is determined by population in the service area, i.e., 1 FTE staff person for every 3,500 residents. Based on state law and the 2010 Census, Indiana Free Library should have 9.4 full-time equivalent staff persons.  The library currently has 7.8 FTE; this means that the library is currently understaffed by approximately 1.6 FTE staff positions.

 The second biggest segment of the budget is spent on maintaining and improving the collections of the library. State law mandates that local libraries spend 12% of their yearly budgets on the acquisition of print materials such as books and periodicals for their collections. Changes are being made to allow for electronics, but the impact is slow in development.

  Personnel costs and collection maintenance consume more than three-quarters of the Indiana Free Library’s budget. The remaining 24% of expenditures cover, for example, all costs related to operations, insurance, advertising, professional services, technology (such as computers and Internet access), and special programming for adults and children.

 

 Income – How does IFL pay the bills?

Income for the Indiana Free Library comes from a variety of sources. These income sources are summarized in the chart below; again the categories employed are based on those required for state reporting.

  Two of the three largest sources of library income are “governmental” and include funding by the state and the local municipalities in the Indiana Free Library service area. In order to receive state funding for operation of the library, IFL must demonstrate, at a minimum, that it is able to secure $5/capita of local funding.  The Pennsykvania average is $24. per capita. Given the most recent census data (n = 32, 924), contributions at the minimum required  level would mean a local funding effort of $164,620, i.e., IFL must spend at least that amount on operating the library to provide services to its patrons.

  The service area municipalities provide funding to IFL in different manners. Shelocta Borough, the smallest municipality, provides no funding; Armstrong Township provides $200/annum. [$5. per capita = $14,990.]To insure that public school students (and their families) from those municipalities receive free access to the library, Indiana Area School District has made contributions for many years; in 2011, IASD contributed $10,000 to the operation of the library. White Township contributes a flat sum of $65,000. [$5. per capita = $79,105.] Support from Indiana Borough is more complex. As permissible under State law, the Borough assesses a tax of .45 mills. [Average Pa millage = 1 mill.] This generates an income of approximately $30,000. Of this money, approximately $6,000 is remitted to the Borough as rent for space in the Community Building, a remainder of approx. $24,000 comes to the library to support operations. The Borough also provides support through various in-kind donations such as utilities and janitorial service; a special formula is used to determine the value of such in-kind contributions (currently at approximately $40,000). In 2011, the total actuall cash income received from the participating municipalities was $99,900. This leaves a gap of $64,720. of the $164,620. which the library must spend to opperate and be in compliance with state requirements. The gap continues to widen as expenses climb.

  State aid functions like a matching grant to provide support to libraries which can demonstrate adequate local funding; state funds are not to be used to fill in gaps created by decreases in local funding, but they are to encourage local funding. A complex funding formula was developed for use in determining the amount of aid which would be available from the state. Because of economic downturns in the last decade, the use of this formula was suspended in 2003 and state aid to local libraries declined. As can be seen in the graph below, IFL funding from the state has declined dramatically in recent years, viz., a loss of approximately $35,000 in two years. To address the sizeable decline from 2009 to 2010, significant reductions in staff were implemented and operating hours were reduced, e.g., the library is no longer open on Fridays. State funding is level for 2012; a 5% cut is projected for the next fiscal year. As new Library Laws go into effect, this picture may change.

   A significant amount of support to insure the functioning of the library comes from local fundraising activities. The Library’s Trustees oversee an annual fund drive and special programs such as Evening in the Stacks. Community support is evident through the fundraising activities (book sales, donations, etc.) and continuing involvement of the New Century/Friends of the Library, the library’s founders. Other community groups sponsor activities whose one-time proceeds are donated in support of the library. Memorial contributions are also included in fundraising; however, such memorials are often restricted and can only be used for certain purposes such as specific collections acquisitions, e.g., children’s books.

   The remaining 16% of income in 2011 came from established endowment funds (e.g., the Jack Endowment), library-generated incomes (e.g., fines, non-resident fees), and grants (which are often restricted to specific purposes, e.g., the acquisition of additional computers or literacy programs).

 

The Challenge – “The Next Chapter”

As is evident from the above information, the Library’s 2011 expenses exceeded its income. The library was able to end the year in the black only because of some carry-over funds from 2010. The use of carry-over funds is a stop-gap measure, and a deficit is currently projected for 2012. Given the current economic picture in the Commonwealth, increases in state funding are unlikely; in fact, additional cuts of 5% have already been announced for the next fiscal year.  To be able to continue its services at the current level, IFL will need to secure increased levels of governmental support to provide a stable funding base and will also need to increase the levels of community support. Any expansion of services and programming will require even greater levels of increased support.