April 29, 2017

Keeping Up | Budgets & Funding

The financial news for libraries in 2016 was for the most part positive—overall, budgets are up modestly—but many, still rebounding from the recession and working to keep pace with needed capital improvements and technology requirements, still feel that they’re just getting by. Libraries, particularly smaller systems, continue to meet the challenge of working with what funds are available. But unexpected or one-time expenses for a library of any size can still result in tightened purse strings. Also, the rising costs of benefits for employees, as well as the uncertainties of the health-care marketplace, are an increasingly common concern.

The results of LJ’s 2017 Budgets and Funding survey of U.S. public libraries, distributed geographically by size and type, mostly extended the good news of the last several years. Out of a total of 467 libraries that replied—a sizable increase over last year’s 371 respondents—most showed a small but steady improvement on the previous year’s gains. Total operating budgets were up 3.4%, a slight increase over the 3.2% rise reported in our 2016 survey.

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The majority of respondents to LJ’s survey—nearly one-fifth—were small libraries, serving populations of less than 10,000, and they also had the most to celebrate. These smaller systems saw some of the biggest gains in the last year. Those that fared most poorly in 2015—libraries serving 10,000–24,999, which had seen an uptick of a mere .9%—in 2016 gained a more robust 3%. Libraries in the 25,000–49,000 range showed the largest growth of all, with 4.9% operating budget increases. Midsize libraries reported the smallest gains in total operating budgets. Those serving 50,000–99,999 only grew by 1.1%, followed by those in the 100,000–249,000 range at 1.9%.

Materials budgets rose 3.7%, as they did in 2015, a significant improvement over the prior year’s 1.5% gain. Over half of the responding libraries—58%—budgeted an increase in materials dollars, with 27% budgeting less. On average, 11.5% of libraries’ total operating budgets went toward materials, with 64% allocated for personnel. The proportion of materials spending was lower still for larger libraries, at 9.2% for those serving one million or more. (For additional information on materials spending, look for LJ’s Materials Survey results in the February 15, 2017, issue.)

Salary and personnel budgets rose by 3.8%, not quite as impressively as 2015’s 4% increase, but a healthy 76% of libraries reported increases in staffing budgets over the past year.

Per capita funding for 2016 averaged $48.11, up from $46.86 in 2015. Total per capita dollars were at their highest in the Midwest and lowest in the South—at $28.63, 40% less than the average. Per capita materials funding remained fairly flat at $5.44. As with total per capita funding, the Midwest came in significantly higher than the rest of the country at $7.24 and the South lowest at $3.47.

For the most part, these numbers represent a steady climb from the economic downturn of the late aughts. Yet financial improvements were not distributed as widely as last year’s, and the number of libraries reporting a rise in total operating budgets was slightly lower this time around: 70%, compared with 2015’s 74%. A growing number of libraries are finally able to spend on needed improvements or projects—but many are still working just to keep up.

WHO AND WHEN

Employment news was less encouraging than dollar amounts might indicate. The average number of FTE in 2016—weighted by population served to even out deviations in respondent sample sizes—was 63.4, a gain of 0.8 full-time employees, but 62% of respondents reported no change in FTE staff size from 2015 to 2016. Personnel increases were largely driven by libraries serving populations greater than 100,000, while the FTE count for smaller libraries remained essentially unchanged. The largest libraries, serving populations of more than a million, averaged 14 new FTE hires in 2016, although the largest personnel increases proportionately were in the 500,000–999,999 service range, with more than half of those libraries reporting new hires. Urban libraries saw easily the largest overall increase in staffing, averaging the addition of 2.8 staff members in 2016.

Nearly 45% of staff members are employed full-time, a percentage that rises along with the size of the library, with urban libraries and libraries in the South most likely to supply more full-time employment. The largest libraries are also more apt to hire MLIS credentialed librarians—27%, compared to the national average of 18%.

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While respondents to LJ’s survey vary from year to year, trending reveals the lowest FTE average in ten years, in a relatively steady decline. Although 2015 FTE briefly reversed the slide, the promise of 2014’s uptick in personnel and salary budgets (see “Paying for People,” ow.ly/­XCKW307vOjp) has yet to manifest in full-time hires.

Even within a smaller job pool, however, administrators are working to remain competitive in order to attract the best candidates. For the Huron Public Library (HPL), OH, more comprehensive benefits were a budgetary priority last year. “The administration and the board made a decision to select a plan that would give greater benefits to our employees,” says Director Benjamin Reid. “We switched to a different cost-sharing model internally…. A big part of that was designing a formula that worked, that had balance. I needed to offer more competitive benefits but keep the plan affordable for the library and for individuals and families as well.”

Reid notes that some colleagues had looked to the health-care marketplace for the coming year, but he chose a more traditional plan. “We are a small library,” he adds. “It’s tough for small organizations that don’t have a big pool of employees to get good rates, or [can’t] afford to join some of the good pools that are out there…. Ultimately, it came down to looking at our size and our budget and thinking creatively about what we wanted to offer and how we would get there.” Reid switched from a health savings account plan to a more traditional PPO with a tiered benefit level within the network; some HPL employees will now pay more out of pocket, but the library is taking on a larger share of costs overall.

Libraries may not have brought in the hoped-for numbers of new employees, but service hours continued their steady recovery, with an across-the-board increase of 2.9 open hours per system. Branches were open an average of 50.5 hours per week—a return to 2013 numbers among all except the smallest, which lagged behind at just under 42 hours per week. Well over half of the largest libraries reported increased hours.

Nearly half the libraries in the sample—49%—consist of a single building. The average number of locations per system is 4.8, unchanged from last year, although eight percent of libraries have completed a new construction project in the last two years (14% among urban libraries). Libraries in the South showed the most volatility with regard to branches, with the highest numbers of both opened and closed locations in 2016.

KEEPING IT LOCAL

Where the money comes from is an increasingly important factor as well.

Two-thirds of the libraries responding to the survey relied on an annual appropriation from local government for their funding in 2016, averaging operating budgets of just over $5 million. Nearly a quarter are funded through an independent library district, and they fared notably better, with an average of $8.8 million—a 75% difference.

Some of the growing advantages seen in independent tax districts can be traced to increased stability, notes John Chrastka, founder and executive director of EveryLibrary, a national nonprofit political action committee for libraries and a 2014 LJ Mover & Shaker. “The difference between now and 2010, in the depths of the recession, is that at least the tax base is stable and the housing base is stable for those districts. So they’re not losing ground on the vagaries of revenue.”

However, he adds, some recessionary pressures are just beginning to show up in parts of the country where revenue is energy-reliant, such as Appalachia or Alaska, and the sources of revenue itself are drying up; others are subject to dwindling federal subsidies. The 11-branch Douglas County Library System, OR, relied on a percentage of timber revenue from Western Oregon O&C-BLM (Oregon & California Bureau of Land Management) forestlands, which has sharply declined in recent years. In the November election, a measure was brought to the table that would have created an independent tax district and generated some $3.8 million for the system. It was defeated, and Douglas County’s libraries are now scrambling for funding solutions that will enable them to remain open in 2017.

“You’ve got a perfect storm there of a shrinking subsidy base from the federal government, a stagnant tax base without a new taxing district, and an attitude that is ‘any tax is a bad tax,’ ” explains Chrastka. “And those 11 towns are going to suffer.” (For more on library ballot performance last fall, see Chrastka and Brian Hart’s “Measured Success” on p. 25ff.)

The South and Northeast are the least likely to depend on independent districts, with Northeast libraries alone among all regions receiving higher budgets through local government. The largest uptick in local funding, at 6.9%, went to larger library districts serving 500,000–999,999, with the smallest districts remaining essentially frozen from last year.

There are some variations on these basic sources; the Carnegie Library of Pittsburgh (CLP), for instance, along with 45 other libraries in Pennsylvania’s Allegheny County and a variety of public institutions such as museums, parks, and the Pittsburgh Zoo and Aquarium, receives its primary funding from one percent of the sales tax paid in the Allegheny Regional Asset District, and to date that allocation has been stable.

“We’ve been fortunate in that the sales tax has been performing fairly well since we’ve come out of the recession,” says Karlyn Voss, CLP director of external and government relations. “We got a two percent increase this year. Last year it was a three percent increase. On an annual basis we actually make projections to the tune of three percent from the Regional Asset District and hope that they can come close. We really do gauge our strength or our stability on how well the sales tax is performing.”

STATE SLIDE

State funding continues its steady decline since the financial downturn of 2007–09, broken only by 2014’s 3.6% increase. Although nearly half of libraries reported no change, in the last fiscal year state funding dropped by a net 2.7%, continuing 2015’s somewhat slighter losses of -1.1%. Only the largest library districts and those serving 50,000–99,999 saw state funds increase.

The sharpest slide was seen in the Midwest, with 7.2% less in state funding over the past fiscal year—countered somewhat by local funding like that in Ohio, which approved 100% of the library levies on the ballot in November. But state funding shortfalls have far-reaching results beyond immediate budget contractions. In Connecticut, interlibrary loan delivery and Internet services have traditionally been provided by the state library. That ended at the beginning of FY16–17, thanks to a suspension of state aid to libraries, “and the return of those state-paid services looks bleak,” notes Karen Roesler, director of library services at Meriden Public Library. “This brings the burden of maintaining services to the local libraries. We are currently paying for Internet and have had to curtail interlibrary loans.” Roesler adds that local libraries and the state library will be looking at ways to fund the delivery of shared materials in the future, and the service will no doubt become a new budget line item going forward.

Donation money made up a small but reliable source of funding—92% of responding libraries reported receiving donations that made up nearly 2% of their operating budgets, at an average of $140,000 apiece. Not surprisingly, 100% of the largest libraries received donations of some kind, with the percentages declining along with library size.

THE ART OF THE ASK

Grant money was less of an across-the-board resource, presumably because of the manpower required by the application process. Still, 79% of LJ’s sample received an average of $112,000 in grant money that accounted for another 2% of their total operating budget. In all libraries, programming and materials were the top beneficiaries of donation and grant money, followed by technology, capital costs, training, and staff/hours.

As with donations, the largest libraries were more likely to apply for and receive grant money. Although only 68% of the smallest libraries did so, the amount received made up a more significant proportion of their operating budgets, averaging 4%—and often that 4% had a major impact.

When administrators at the Bedford Public Library (BPL), NH, realized that the 20-year-old building would need a new HVAC system, they began setting aside money and researching options. With $500,000 of library funds allocated and a series of energy audits in place, it was decided that a geothermal system would be the most energy-efficient but would cost $880,000. The town Department of Public Works paid for a grant writer, and BPL was able to secure a New Hampshire Public Utilities Commission Renewable Energy Fund Grant for nearly $388,000 to make up the difference, as well as a $50,000 Energy Efficiency Services Rebate from Eversource Energy.

“We had our ducks in a row almost incidentally,” recalls Director Mary Ann Senatro: between the energy audits and the leveraged funds already in place, the funding agency saw that BPL was “shovel-ready” and awarded it the grant from among a competitive field. The library’s mission worked in its favor as well, says Senatro. “We were going up against a lot of other projects in the state, but because we were a library and everyone in town uses us…I think they liked the fact that a lot of people would see what an energy-efficient building would be like and would learn about geothermal. So part of our piece in the whole grant process is being an educational place.”

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TALKING TECH

Technology budgets were a new line item in the 2016 survey, and nearly half of the responding libraries reported an increase, at a healthy 8.4%, over 2015. Several indicated that technology spending does not come out of their overall budget but from some other source such as state money or IMLS grants, and some did not have separate technology budgets.

While most libraries increased their technology spending between 2015 and 2016, those on either end of the size spectrum saw drops. The smallest libraries, serving populations of less than 10,000, saw a 7.8% reduction in their tech budgets, and those serving 500,000–999,999, a smaller dip of 0.9%. Libraries in the 250,000–499,000 range, on the other hand, grew their technology budgets by a healthy 20.9%.

These numbers will no doubt fluctuate year by year for each library, depending on specific technology projects—from computer upgrades to installing an RFID system to migrating to a new integrated library system (ILS). Although one in five respondents reported no new or notably increased expenses during the year, outlays that did fall into that category were topped by unexpected or one-time costs such as new tech equipment or building upkeep—and these often proved to be libraries’ biggest challenges in 2016.

BIG SPENDERS

Some 15% of the libraries surveyed have a capital improvement project currently under way, and 23% have completed one in the last two years; another 17% plan to begin one in the next two years. Those that received funding through independent library districts were more likely to have work in progress or planned than libraries that relied on local appropriations. But 13% stated that although their library has a need for capital improvements of some kind, it does not have adequate funds to execute them. Nearly a third of the respondents had no projects in the works or planned for; this number rose to 43% among rural libraries.

Health-care costs were not only concerns for libraries, such as HPL, looking to improve benefits but for those that simply want to keep up. CLP’s Voss reports that while the estimated 5.6% increase in the library’s health-care costs for 2017 fell in line with personnel budget increases last year, neither did the margins offer a lot of leeway for additional personnel outlays. Employee benefits comprise around 13% of the library’s total budget, says Voss. “We use that 13% as our benchmark,” she explains, “and as we learn what our increases are going to be for health care and other benefits, if it ends up being much higher, then we are going to have to reevaluate what that benefits package looks like.”

So far CLP administration hasn’t had to make any hard decisions. “We’re going to keep our fingers crossed,” says Voss. And while the margin between thriving and surviving may have been tighter last year than most libraries would wish, all appreciate the continued upward trend, no matter how slight. “Everything has been pretty stable lately,” Voss agrees. “It’s good news—a far cry from not too long ago.”

This article was published in Library Journal's February 1, 2017 issue. Subscribe today and save up to 35% off the regular subscription rate.

Lisa Peet About Lisa Peet

Lisa Peet is Associate Editor, News for Library Journal.

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