Libraries Emerging from COVID-19: Budget and Funding Concerns
September 1, 2020
Diane Foote, Illinois Library Association
As of the time of this writing, the state of Illinois is in Phase 4 of Governor Pritzker’s “Restore Illinois” plan; on the federal level, the U.S. House and Senate have been unable to come to terms on the next COVID-19 relief bill. Most public libraries across the state have resumed some in-person public services, in addition to continuing robust virtual services that had continued during the stay-at-home executive orders this past spring. Libraries are not specifically mentioned in “Restore Illinois,” and in fact, have not been explicitly named in any of the Governor’s executive orders throughout the COVID-19 pandemic response; this enables local decision-making depending on local circumstances, but can also be a source of frustration for libraries and boards seeking to rely on a firm legal foundation. Library decisions regarding programs and services have an impact on future library budgets: If the library is closed physically to the public, we risk a public perception that the library is not offering services, which is not the case. At the same time, libraries are very aware of the pressures felt by Illinois residents, many of whom have lost jobs or income themselves; and library staff remain focused on the need to balance public safety with public service.
The Illinois Heartland Library System and the Reaching Across Illinois Library System have been soliciting and sharing information about what libraries across the state are doing as we begin to emerge from the strict statewide stay-at-home orders. ILA has issued statements and recommendations regarding libraries’ physical buildings closing and/or re-opening, but those do not have the force of law. ILA, the Illinois State Library, and the systems have all shared information about developing legislation and executive orders as they are implemented; ILA has also developed the “Bigger than a Building” campaign to give library directors and boards the tools needed to make an effective case for libraries, even if the physical building is either closed temporarily, or open in a limited manner for the time being.
The budget picture for Illinois public libraries is complex, with differences between district libraries and municipal libraries, and further differences on the individual library level. There have been a number of COVID-19 relief bills on the federal level, including the first one to include dedicated funding to libraries, the CARES Act, which provided $50 million for libraries nationwide through IMLS’ Grants to States program. To date, the United States House of Representatives has passed the HEROES Act, which includes an additional $5 million. This is far short of the $2 billion the American Library Association seeks in its advocacy for the Library Stabilization Fund Act, which has bicameral sponsorship including from Illinois U.S. Representatives Janice Schakowsky, Bradley Schneider, Cheri Bustos, and Raja Krishnamoorthi. ILA is advocating in collaboration with ALA for this act.
In addition to relief funding dedicated to libraries, ILA and ALA are supporting the Special Districts Provide Essential Services Act, which would provide relief funding to special districts, including fire districts, park districts, mosquito abatement districts, water reclamation districts, and yes, library districts. It currently has one sponsor from Illinois: U.S. Representative Raja Krishnamoorthi.
While vaccines and effective treatments are in development, it is likely libraries will need to wrestle with questions about their services and budgets for the foreseeable future; and it’s possible the state will revert to Phase 3, or an even earlier phase, of “Restore Illinois.” Here is a roundup of current and potential budget concerns from public libraries around the state, municipal and district. This is not an exhaustive or comprehensive list but rather a snapshot of some illustrative examples. Directors interviewed are those who are serving as sources for budget-related questions in Director’s University, a collaborative initiative of ILA, the Illinois State Library, the Illinois Heartland Library System, and the Reaching Across Illinois Library System.
On the revenue side, most Illinois public libraries are funded primarily by local property taxes. Budget processes and concerns differ a bit between library districts and municipal (city, village, etc.) libraries. Revenue challenges related to property taxes will be realized in the medium- to long-term rather than immediately for libraries of both types, given that property taxes had already been collected for the fiscal year during which the stay-at-home order was in place. Concerns include the rate at which taxpayers, under pressure themselves from layoffs and furloughs, may default on property taxes, and the lengthening of time to pay tax bills with no penalty, as counties seek to offer taxpayers some relief. A director at a northwest suburban city library states, “As a city library in a home rule municipality, I anticipate that the city would like to keep their 2020 levy increase as low as possible. They may consider increasing the city’s portion of the aggregate levy to make up for lost sales tax income, etc., and need to decrease the Library’s portion. This is concerning because the Library would be dependent on the city using its home rule privilege to rebound the levy in the future, and as a component unit, the Library then falls into direct competition with important priorities like police and fire.” At the Effingham Public Library, a city library in southern Illinois, “Our loss of revenue is much more likely to be felt in the coming years," says director Amanda McKay. “For us, the biggest revenue challenge is that our tax receipts for this year will be delayed...we anticipate that we won’t see our full allotment until March 2021, with one month remaining in our fiscal year.” District libraries share this concern for the long term, cited by the director of a library district in southern Illinois, near St. Louis: “We receive almost 97% of our revenue from property taxes. And, luckily property taxes are being paid, especially if they are in escrow. But, I don’t know how long taxes will continue to be paid if the economy continues on a downward trend. In our county taxes can now be deferred to the next payment cycle without penalty—and some people have elected to do that, which has a direct impact on our revenue and cash flow.”
District libraries, while not as directly dependent on their local municipality, also expect pressure from residents to keep their levies flat this year, which has repercussions in future years as future increases are on based on a percentage of each prior year. The director of a central Illinois district library says, “At our last board meeting, we discussed our levy for FY22. We are tax-capped in our county and in the past our public has been supportive when we've sought to increase our levy beyond the cap via a truth-in-taxation process, but for this upcoming levy, we are considering getting under that 5% cap because of the concerns from the public.” This isn’t unique to libraries, according to this director: “I think all public bodies are going to face some members of the public who are upset about having to pay property taxes, but not getting all of the services we typically provide during COVID.”
Other sources of revenue for libraries include copier/fax charges, passport renewal or auto license sticker renewal fees, donations, investment income, Illinois’ “Personal Property Replacement Tax (PPRT)” received by some library districts and municipalities, fees for non-resident library cards, funding via the LSTA Grants to States program, and a few others. Most of these sources have been negatively impacted by COVID-19, particularly PPRT. The Urbana Free Library, a city library in central Illinois, has already made cuts based on an expected drop in PPRT revenue.
Passport application and other fees were noted by a number of directors, including Alex Todd of the Prospect Heights Public Library, “As libraries open to the public, they do bring in copier and other in-house fees, but it will still be less than when we were fully open. The newest, largest outside source of income is passport application fees;” and the director of a public library district outside St. Louis: “Another source of alternate revenue for us is our role as a Passport Application Acceptance Facility— every passport application that we process gets the library $35.00 in revenue. Additionally, we budget for revenue from photocopies and faxes. While physically closed those were zero revenues.” Directors look to these sources of revenue to provide some relief for their local taxpayers. According to this same director, “At our library, we have been actively pursuing alternate revenue sources. Just before the library closed to in-person According to director Celeste Choate, “Urbana Free was advised by the city that instead of an approximately $10,000 increase in PPRT in fiscal year 2021, we should expect a 30% decrease. Overall, that’s an approximate $40,000 swing from plenty to deficit. We already made that cut to our budget, and it hurt.”
Another central Illinois city library expects a 7% decrease in PPRT, and Leander Spearman, director of the Bellowood Public Library, a city library near St. Louis, says he expects up to a 66% decrease in the non-property tax revenues for his library, which overall make up 20% of his budget, including PPRT, fines and fees, passport fees, interest income, sales of used books and branded merchandise, and nonresident cards. The director of a public library district in the south Chicago suburbs concurs: “Declining PPRT is a huge concern in addition to declining tax revenue,” she says.
Passport application and other fees were noted by a number of directors, including Alex Todd of the Prospect Heights Public Library, “As libraries open to the public, they do bring in copier and other in-house fees, but it will still be less than when we were fully open. The newest, largest outside source of income is passport application fees;” and the director of a public library district outside St. Louis: “Another source of alternate revenue for us is our role as a Passport Application Acceptance Facility—every passport application that we process gets the library $35.00 in revenue. Additionally, we budget for revenue from photocopies and faxes. While physically closed those were zero revenues.” Directors look to these sources of revenue to provide some relief for their local taxpayers. According to this same director, “At our library, we have been actively pursuing alternate revenue sources. Just before the library closed to in-person public services mid-March, we had begun selling license renewal stickers. Each renewal sticker we sell at the library gets us about $6.25 in revenue—revenue that hopefully eventually will allow us to flatten tax levies. ” Todd is taking a similar tack: “A flat levy is something many libraries are exploring, including Prospect Heights Public Library District. While the impact of this move won’t show upon tax bills until the fall 2021 bills, it is a worthwhile gesture of showing empathy with our taxpayers.”
This acknowledgement extends to local businesses as well, many of whom typically support their area libraries with sponsorships and donations. According to Bobbi Perryman of the Vespasian-Warner Public Library District in Clinton in central Illinois, “We typically rely on local businesses for support for summer reading club and other programs, but we have been reluctant to ask for any sort of donations given the current circumstances. For many smaller libraries, business support is the only way they can host programming. Our friends group hasn’t been able to have their sales due to COVID, so we are losing that money as well.” It is important to note that while pressure on future levies is a medium- to long-term budget concern, the lowered revenue from fees and business support or donations have already had an immediate impact on library revenues while libraries were closed to in-person public services, and open now in a limited manner.
A complete budget picture includes both revenues and expenses. Libraries are seeing increases in unbudgeted expenses for cleaning supplies, building Plexiglas barriers at public service desks and construction costs for redesign of these areas, PPE for staff and patrons, additional signage, additional electronic resources, devices to enable self-service such as self-checkout stations, and legal fees, among other costs. Here in Illinois, where a minimum wage increase is continuing to be phased in, there is additional pressure from staffing expenses; at the same time, libraries can’t operate without a full complement of staff.
The tension between re-opening to in-person public services and the imperative to keep library staff and patrons safe and continue to help mitigate spread of COVID-19, has real costs. Kate Hall, executive director of the Northbrook Public Library, a village library in the northern Chicago suburbs, quantifies some of these costs: “We are certainly seeing an increase in costs due to COVID. From March-July we spent $22,000 on PPE and materials to get the building reopened. We have had two positive cases of COVID in the library and had to pay $2,000 each time to do a deep clean of the building. The costs for certain PPE are on the rise. When we originally purchased gloves back in April, they were about $8 a box and have now increased to $12-$15 a box.” Hall is also supporting her staff who have been working remotely, noting “We are also reimbursing people for their work from home expenses for technology and expect to spend about $10,000 this year on that. ” Costs for PPE, cleaning, and technology are ongoing operational expenses that are expected to carry into future years; this year, libraries have also incurred capital expenses for reconfiguring public service desks. Leander Spearman of Bellwood Public Library describes some measures his library has taken already: “We have had to totally re-imagine how we provide library service and redirect a lot of what we offer to a self service model. I purchased an internal book return so patrons can return material without staff interaction. Two self-checkout stations were installed so patrons can checkout their own material. Self-service payment terminals are being considered so patrons pay fines and fees without staff interaction. OPAC computer terminals are being replaced with tablets that can be more easily sanitized.” All told, he has incurred about $15,000 in unbudgeted expenses to date. That is the approximate spent cost also cited by two city libraries, one in the northwestern Chicago suburbs and the other in central Illinois, both of whom hope to recoup some of these expenses by working with their municipality to apply for reimbursement through Illinois Department of Commerce and Economic Opportunity's Coronavirus Urgent Remediation Emergency (CURE) Support Program, funded by federal CARES Act relief for municipal units of government. A central Illinois library director also cites increased “legal fees to review all the emerging COVID-19 legislation, executive orders, emergency rules, and so on” as a large unbudgeted expense.
Library directors and library boards continue to work together to craft solutions that address taxpayer relief while not causing a budget crisis in the library, resulting in staff or service cuts. Worries about the budget and concerns for taxpayers under pressure, who are after all librarians’ neighbors as well as our patrons, are necessarily balanced with overlying fears about public health and a high priority on serving our publics during this time. As Janet Cler, director of Tolono Public Library in central Illinois eloquently says, “For my library, and other libraries in tax-cap counties, my concern centers around what happens when residents are unable to pay their real estate tax bills. At the same time, we have increased funds spent on COVID related items to ensure the safety of our staff and our public. Libraries are vital to small communities, especially during these uncertain times. In smaller libraries, we are often the sounding board for those residents who are concerned with what is going on in everyday life. We are stable in our communities and looked upon with a favorable view. We want to be here to offer services that will help with job searches, resumes, and unemployment filings via the computers.” Cler points out that in smaller communities in particular, “Funding of libraries is essential for the recovery that will be needed to move communities forward. While I understand so many entities are vital to communities such as fire stations, police stations, churches, and schools, libraries are right up there too.”