Increasing transparency and understanding in public library finances

I N D IANA L I B R ARY FED ER ATI O N ’ S P OS IT I O N 202 1

The Indiana General Assembly established the system for budgets, tax levies, and reserves used

by libraries and other government units. Public libraries follow the law and guidance provided by

the Department of Local Government Finance (DLGF), State Board of Accounts (SBOA), and the

Indiana State Library (ISL). Guidance includes reserves provisions for maintenance, emergencies,

and capital improvements.

What are the issues? All local units, including public libraries, have suffered revenue loss due to the pandemic. Libraries are unable to offset revenue loss by increasing fees and are subject to external decisions regarding income tax distribution.

Combined with the property tax caps, this leaves public library budgets particularly vulnerable to the economy and the whims of local officials.

What is Indiana Library Federation’s position?

Libraries receive a small portion of every property tax dollar (4 cents), but it represents libraries’ primary funding source and is critically important.

Because of that, any tax structure changes could detrimentally impact these important community hubs. If any major tax structure modifications are being considered, ILF wants to be at the table to ensure such changes are harmless.

How does library funding compare?

Indiana public libraries are good stewards of the taxpayer funding they receive and rely on. The budget process transparent with open public meetings and online information readily available.

Because of their dependence on property taxes, libraries are disproportionally impacted when property owners in a community run up against the tax caps. These caps pit government units against each other.

On average, 70 percent of library operating revenues come from property taxes and 23 percent from local income taxes. Under arcane state law, libraries are required to request the maximum levy in order to secure needed Local Income Tax (LIT) funds. ILF supports efforts to change the LIT law to balance responsible stewardship, funding stability, and increased transparency.

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Why are reserve funds so important to libraries?

Libraries, unlike government units such as schools and jails, cannot levy for cumulative funds. The annual library budget and levy supports annual operating expenses.

During emergencies and economic downturns, however, responsible libraries rely on reserve funds. They will budget rainy day funds and Library Improvement Reserve Funds (LIRF) to handle expected repair and replacement of HVAC units, roofs, carpet, and elevators, to use a few examples.

Instead of burdening taxpayers with increased tax rates, new debt and

internet payments, libraries prefer to utilize reserve funds and savings.

Indiana Library Federation 941 E. 86th St., Suite 260 Indianapolis, IN 46240 ILFonline.org

Libraries Transform® Indiana

Indiana Library Federation believes that libraries, with all of their modern amenities and innovations, are a smart

investment, with the potential to transform communities and create a passion for lifelong learning.

By the Numbers: Indiana Public Libraries

236 public libraries

425 branches

26 bookmobiles

60,547 children’s programs

2,120,204 children’s program attendance

157,435 total programs

3,130,666 total program attendance

30,220,997 total library visits per year

*2019 Public Library Statistics, https://www.in.gov/library/plstats.htm

The average year most Indiana

libraries were built was 1949. The

average year of the most recent

addition was 2003.

ILF Advocacy Approach

ILF is a statewide nonprofit association dedicated to

advancing library services for the benefit of Indiana

residents.

ILF is nonpartisan and reflects the core values of the library field, including lifelong

learning, freedom of ideas, and civil discourse.

ILF monitors public policies that affect all types of

libraries and the people who work in and support them.

ILF engages its members and stakeholders to be ready for action in library advocacy.