Findings - Funding

In July 2001, Virginia’s Joint Legislative Audit and Review Commission (JLARC) released a legislatively mandated review of State aid to public libraries. The review looked at intended purposes of State aid to libraries and at the mechanisms used to determine the distribution of those funds. In general, the library community concurred with JLARC’s findings and was supportive of the Commission’s recommendations.

The Library of Virginia, the Virginia Library Association, the Virginia Public Library Director’s Association and local libraries looked forward to working with the legislature on implementing JLARC’s recommendations. However, the tragic events of September 11, 2001 changed the nation’s focus and put work on the JLARC recommendations on hold. The consultants were directed to review the JLARC recommendations as part of the current study.

The Joint Legislative Audit and Review Commission indicated that State aid to libraries was "…largely effective in achieving its objectives." Although the consultants generally agree with this conclusion, we offer the following observations. In structuring our response, we have used the categories used by JLARC in their Report Summary.

State Aid encourages the Maintenance of Standards and Local Support
We agree that State Aid has been invaluable in encouraging the maintenance of standards and in encouraging local support. Local libraries have been able to use State aid to leverage local investment in libraries. Furthermore, the potential loss or reduction of State aid has acted as a brake on the reduction of services below the required levels. However, we have already indicated that we believe that standards need to be strengthened. Expectations regarding the level and nature of services have changed over time and standards need to be revised to reflect this fact. We do not disagree with JLARC; rather, we believe that Virginia needs to increase its standards rather than just maintaining them. A strengthening of standards would likely require an increase in State funding as an incentive as well.

We also believe that the current level of State aid doesn’t do enough to encourage local investment. While the increase in local support documented by JLARC is impressive, much of the growth has been in burgeoning suburban areas rather than being distributed throughout the State. A higher level of incentive from the State would enable some of the roughly 40 libraries identified earlier as being "sub-standard" to gain much needed local support. Poor local support is the single factor most responsible for poor performance.

The Main Components of the Formula Should Be Kept and Updated
The three components of the State aid formula – population, square miles, and local expenditures – provide a sound foundation for the distribution of funds. This trio of factors has proven itself successful not just in Virginia but in several other states as well. JLARC’s assertion that these factors address both State goals and local needs is absolutely correct. We also concur with JLARC’s suggestion that the population and the expenditure caps should be lifted. However, the consultants would also caution that these steps must be taken in ways that do not exacerbate the equity situation.

Rapidly growing areas typically find their funding lagging population growth and the demand for services that this entails. The population cap potentially penalizes libraries in this situation. At the present time, only Fairfax County is faced with the dilemma of rapid growth and a population in excess of 600,000. However, this penalty could apply to other areas of the State in the future. It is sensible to remove this restriction while the cost of doing so is relatively low.

The removal of the expenditure cap is considerably more complex as well as being considerably more costly to address. A complete removal of the expenditure cap is probably impractical because of the nearly tripling of State aid that it would involve. However, the fact that the local expenditures cap has not been adjusted for fifteen years means that more and more libraries have been affected by the cap. JLARC proposed several alternatives for addressing the situation and seemed to favor the idea of applying a 3% inflationary rate per year starting with 1990. While this is a practical compromise, it fails to recognize that much of the growth in local expenditures is not due to inflation alone. Rather, significant growth is due to the fact that population growth has required additional expenditures simply in order to maintain service levels. The consultants believe that adjustments at regular intervals (perhaps every five years and starting with an initial adjustment) should be factored into State aid calculations. Consumer Price Index adjustments could be made in the intervening years to ensure that the cost of the five year adjustment is more feasible. Furthermore, we believe that the removal of the caps should be "triggered" by authorization and appropriation of funding to address the equity of access issue.

The JLARC Report also discussed the "regional bonus" available to libraries serving multiple jurisdictions. While some areas of the State that are not served by regional libraries take exception to the supplemental funding for regional systems, the consultants believe that this provision of the State aid formula is necessary to ensure the continuation of these larger units of service. Any reversion to smaller independent libraries would represent a setback in the development of quality library services. In fact, in the consultants’ opinion, there are still a number of libraries in Virginia that would benefit from participation in a larger unit of service.

Larger units of service do not guarantee higher quality service; however they do provide opportunities for economies of scale and greater coordination of services that make it far more likely that enhanced services will be available. Additional efforts should be made to encourage regionalization in the areas that could still derive a benefit from consolidated governance. Other efforts to achieve economies of scale should also be encouraged through grants and incentives. This would include efforts to build shared automation systems that serve multiple jurisdictions, regional coordination of continuing education opportunities, and the sharing of specialty staff (e.g., technology support staff, young adult librarians, etc.).

Local Ability to Fund Library Services Could Be Addressed
As was noted earlier in this document, people who live in some of the areas that could benefit most from quality public library resources and services do not have access to high level services. It was also noted that many of the libraries offering sub-standard services are in areas with low median household incomes. The consultants agree with JLARC’s conclusion that a separate stream of funding would be necessary to address this important equity issue. The two factors recommended for inclusion in a formula to distribute this supplemental aid, size of operation and low revenue capacity, are also seen as appropriate.

The consultants believe that the implementation of this JLARC recommendation with relatively robust funding has great potential for elevating the overall level of library and information services in the Commonwealth. It could significantly close the gap between the "haves" and the "have-nots" and could go a long way toward ensuring that every Virginian has access to good basic public library service.

Infopowering the Commonwealth Funding Should Be Restored
It has already been noted that Virginia’s public libraries are highly dependent on grants, gifts, and other "soft" money to meet their technology needs. Many Virginia libraries are struggling to sustain the technology they already have and are finding it next to impossible to upgrade their technology on a regular basis. Computers, network devices, and peripheral equipment purchased with Infopowering funds and received through Gates grants are nearing the end of their life cycle.

The JLARC report recognized that the nature of library services has changed and is continuing to change. JLARC also noted that the Infopowering the Commonwealth program provides a mechanism for bridging the digital divide. It is one of the few programs that offers a partial solution to the problem of equity of access to quality public library services. The State of Virginia should see the Infopowering program as more than simply an expenditure. It should be recognized as an excellent investment in the future of the people of the Commonwealth. The consultants thoroughly agree with JLARC’s assessment that Infopowering funding should be restored.

The Virginia library community also agrees strongly with this recommendation. The web survey of library directors that was conducted by the consultants asked participants to rate the JLARC recommendations on a five-point scale with 1 representing "very low priority" and 5 representing "very high priority." The restoration of funding for Infopowering outranked all other JLARC recommendations with a mean score of 4.63.

Public Libraries in Virginia Benefit from Collaborative Efforts
The consultants found many examples of highly developed partnerships between libraries and other community organizations ranging from schools and health departments to literacy programs and local history organizations. JLARC’s encouragement of ongoing collaborative efforts is fundamentally sound.

A Construction Component Should Not Be Included in the Formula AND Restoration of the Construction Grant Program is Needed
JLARC indicated that nearly half of the libraries that responded to the survey JLARC conducted as part of their study reported significant deficiencies in their buildings. The survey conducted by the consultants garnered similar results. Over seventy-five percent (75.39%) characterized their library’s need for additional space as either critical or moderate with over forty-three percent (43.08%) saying that their need was critical.

The consultants observed many libraries that were extremely crowded and visited many buildings that were not originally designed to function as libraries. Many ADA compliance issues were observed. The question regarding funding for library facilities is not whether funds are needed for library construction and renovation. Rather, the question is the source of this type of capital funding.

The consultants believe that JLARC got it right in suggesting that mixing capital funds with operational funds within the basic State aid formula was ill-advised. The JLARC report characterized its recommendation for a separate program for library construction as a "restoration" in reference to the legislative intent in Item 255C of the 2000 Appropriation Act. In fact, this program never became a reality. Nevertheless, the consultants agree with JLARC that a separate construction grant program is a much sounder approach to meeting Virginia’s need for updated library facilities than is co-mingling capital funding with the operational funds provided through basic State aid.

A number of states, including Delaware, Massachusetts, and California, have extensive library construction grant or bond programs in place. State investment in public library buildings can serve multiple purposes. In addition to supporting improved library services, new or improved buildings can act as an economic development tool, can help improve blighted areas, and can stimulate local economies. As was stated in the introduction, public libraries are usually the most heavily used public building in a given community. The location of a major library structure can have a powerful impact on other development activities and can be used as a tool to combat urban sprawl.

The need for this program is great as is the pent-up demand. Detailed criteria and a mechanism for establishing priority projects will need to be developed if the construction program is reinstated and funded at a significant level.

Other Funding Issues
The consultants believe that there is at least one important funding issue that falls outside of the realm of the JLARC study. The consultants found little evidence that Virginia’s libraries had any dependable source of funding for innovative projects. In many states, Federal Library Services and Technology Act (LSTA) funds are used for this purpose. At the current time, the lion’s share of Virginia’s LSTA allocation is tied up funding Find It Virginia. Nearly everyone agrees that this is a vitally important ongoing program.

However, the consultants wish to point out that many other states have been successful in convincing their state legislatures to fund similar online database licensing with state revenues. Securing state funding for Find It Virginia along with the other components of Infopowering the Commonwealth would have the double benefit of freeing up over $ 2 million for other efforts including innovative projects.

Findings – FUNDING