LIBRARY FINANCING IN THE UNITED STATES OF AMERICA:
A GENERAL OVERVIEW

James Sweetland, Library Link Convenor, USA

In any discussion of libraries in the USA, all generalizations are, to some degree, misleading, due to at least two facts: First, the US is constitutionally a federal republic, with some governmental functions centralized on the national level, others residing in the fifty states, and many others at the local level. Secondly, there is a very strong reliance on the "private sector" for many kinds of services provided by government in some other nations. This sector includes both businesses run for a profit, and also a very large number of voluntary nonprofit organizations of all kinds. With this caveat in mind, the following is an attempt to briefly describe current funding of libraries.

Public Libraries
According to a recent count by the American Library Association, there are 8,929 public "libraries" in the US in terms of administrative units--many of these have more than one branch, for a total of about 15, 946 library buildings. Although most states have some very general definition of what constitutes a public library, the definitions are very broad, and vary considerably from state to state. Often, the most important effect of the definition is to obtain certification of eligibility for financial aid from the state, authorization to receive local tax money, and/or ability to receive services from the state's library agency.

In general public libraries receive the vast majority of their funding from local taxes, and the most common form of local tax is one levied on real estate. In fiscal year 1994, on the average, the typical public library received about 78% of its funding from local sources, 12% from state government, ca. 1% from the federal government, and a bit over 8% from all other funds. However, the range of funding from these sources varies considerably from state to state; for example Ohio libraries receive over 72% of their funding from the state and only 19% directly from local sources, whereas at the other extreme, Nevada public libraries received 98% of their funding directly from local taxes.

In recent years a "taxpayers' revolt" against local taxes, particularly the property tax, has led some states to reduce or restrict property tax support. This has led to a strong movement to increase funding from private sources, ranging from private philanthropy, to increased use of "friends of the library" income producing activities such as bake sales, and even direct charges for some services.

Similarly, as local tax funding has effectively been reduced, libraries are beginning to rely more upon state government and federal government funding, especially for new technology, networking activities, and the like Thus, reliance on state and federal funding for library networking and interlibrary lending, going back to the 1950's, appears to be increasing, with the addition of Internet connections and rather sophisticated union catalogs at the county and state level. However, on balance, it appears that local funding per capita has remained relatively stable, with some evidence that many communities would be willing to increase tax or bonding support for public library services.

A Library Journal survey of 2200 libraries shows the effect of this trend: funding sources for the typical library included: local taxes (46.5%), county taxes (31%), state funding (14.4%), library fines (1.94%), private fundraising (1.4%), federal government funds (1%), fee-based services (.64%), cost-recovery charges (.26%), rental collections (.15%) and all other types of funding (2.71%).

College and University Libraries
These, also often called just "academic libraries" serve educational institutions beyond the secondary level, including two-year colleges and technical institutes, four-year bachelor's degree granting institutions, and universities. Overall, there are 3,274 academic libraries, with 2.012 serving the four-year colleges and universities. In any discussion of academic libraries, one must remember that in addition to significant differences in size, there are also two significant groups of academic institutions--those funded by the state government, and those funded by private agencies.

Clearly the greatest source of funding for the state-supported academic institutions is state tax money, while that for the privately-supported institutions is private funds. However, as with public libraries, state institutions do get some non-tax support, and many private institutions do get some state and federal direct tax support. In addition, as nonprofit educational institutions, private colleges are exempt from most taxes. (However, noneducational enterprises, such as food services and bookstores, are generally subject to some or all taxes).

An important point to keep in mind is that, at least in recent years, overall support for academic libraries in general has actually declined as a percentage of the total educational and administrative budget. The Association of College and Research Libraries recommends as a standard that library support should be about 6% of the total educational budget, in fact over the past twenty years, average support has dropped from slightly over 4% of these to a bit over 3%. Some academic libraries have experimented with establishing fee-based services, geared primarily to businesses. However, in addition to some legal difficulties based on accusations of unfair competition wit the private sector, such services are essentially on a cost-recovery basis, with little overall impact on the rest o the library's budget. As with public libraries, college and university libraries are trying for greater support from private funds of all kinds. However, much of money from philanthropic foundations is intended as seed money for new projects or support for research, so that, for example, while there was funding available for the establishment of online catalogs and resource sharing in the past, this has essentially dropped off; in any event, such funding remains a relatively small part of the total budget.

Both private and state-funded academic libraries do have some income from federal sources, in terms of minimal support for collections, a bit more for experimental automation and new services, and the like. However, there is concern that this source of funding is being eliminated as the federal government attempts to reduce the national deficit.

School Libraries
These are also called "media centers", "library media centers", or "instructional media centers," among other terms. These agencies serve schools teaching up to the 12th grade. There are a total of 97,976 school libraries, with 76,545 serving publicly supported schools and 21,431 serving privately funded schools.

As with academic libraries, funding sources obviously vary with the type of school. In nearly all cases, however, the public schools received the vast majority of funding from local taxes, as with the public libraries, traditionally a tax on real estate. In recent years, a few states have drastically reduced or even eliminated this source of support, replacing it with state funding, usually collected via sales and income taxes. In the process, many communities have cut back on services provided by schools--too often, this has meant that libraries have been seen as a supplemental services. Some states have seen wholesales closing of school libraries; others have seen hours curtailed drastically; still others have seen most of the professionally trained library staff either laid off or reassigned, so that the "library" is now staffed by either untrained clerks or volunteers.

Generally speaking, schools are very limited in their ability to raise private funds, although in some areas local events such as bake sales remain a significant source of income. And, as with other types of libraries, private donations from individual benefactors are being sought. An important issue for schools in general is an overall trend to privatization, with some experiments, such as the "Edison project" to hire private firms to operate public schools. Generally, given the strong democratic tradition of the public school, such type of privatization has been, to say the least, very controversial.

Special Libraries
This category includes specialized information centers and libraries serving business, industry, government, religious institutions, hospitals, and the like. There over 10,192 special libraries, plus 1,864 government libraries and another 428 serving the armed forces. An interesting category are the special libraries located within academic institutions, especially law and medical libraries. Sometimes these are counted as academic libraries; others count them as special libraries.

Governmental libraries, of course, received nearly all their funds from the parent governmental body, with a little in some cases from other agencies. Funding for the for-profit private special libraries comes, for all practical purposes, from the parent business firm, with a little income sometimes from fee-based services to related firms. However, the nature of this funding varies. In many cases, the library (or "information center") receives its funds as part of the business overhead, a situation not unlike that of the academic library. However, many libraries have always received much of their funding by behaving much as a business within the business--charging a given department or other unit for questions answered, research performed, documents delivered and the like. A common pattern is for the library to received some basic funds from the business, including in-kind services, such as rent-free space and janitorial services, but then also charge back for many services. A new approach, quite controversial to date, is the elimination of the library unit entirely, with all services provided by an outside agency under contract.

Nonprofit private special libraries again receive funding in much the same way - usually as part of the budget of the parent organization. However, many also receive at least some support from direct philanthropy, and from sale of services or products.

This very brief overview, while somewhat complex, is in fact not complete. The information complex in the United States also includes services provided directly to consumers by for-profit information businesses, services primarily to libraries by such agencies as the non-profit, but private Online Computer Library Center, and a variety of regional and statewide networks, some part of state governments, others connected with universities, and still others independent non-profit corporations.

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