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Squeeze Play:

Public Library Circulation


and Budget Trends, FY1992-FY2004
Robert E. Molyneux

ABSTRACT. This article analyzes longitudinal data from the National


Commission on Libraries and Information Science (NCLIS) for the
12 years from 1992 to 2004. The statistics demonstrate that library cir-
culation rose faster than population served. Aggregate library income,
meanwhile, first declined then rose slowly from their lows in 2003. In the
same period, operating expenses rose faster than income, squeezing pur-
chasing power. The article provides more detail for purchase of electronic
materials, by type of employees and “other” expense categories. The au-
thor concludes with a discussion of the factors that will affect library
income in the years immediately after the period studied. doi:10.1300/
J118v26n03_05 [Article copies available for a fee from The Haworth Docu-
ment Delivery Service: 1-800-HAWORTH. E-mail address: <docdelivery@
haworthpress.com> Website: <http://www.HaworthPress.com> © 2007 by The
Haworth Press. All rights reserved.]

KEYWORDS. Circulation trends, 1992-2004; expense trends, 1992-


2004; income trends, 1992-2004; statistical analysis, trend analysis, Na-
tional Center for Education statistics

INTRODUCTION

Examining library trends through published data reveals details that


are not readily observable in the passing scene. Longitudinal data about
the state of public libraries recompiled from annual data published by the

Robert E. Molyneux, PhD, is Vice President for Business Development, Equinox


Software, Inc. Norcross, GA 30071-1452 (E-mail: bob@esilibrary.com).
Public Library Quarterly, Vol. 26(3/4) 2007
Available online at http://www.haworthpress.com/web/PLQ
© 2007 by The Haworth Press. All rights reserved.
doi:10.1300/J118v26n03_05 101
102 PUBLIC LIBRARY QUARTERLY

U.S. National Center for Education Statistics (NCES) are available from
the U.S. National Commission on Libraries and Information Science
(NCLIS) and are used here to investigate the state of public library trends.

LIBRARY CIRCULATION INCREASED FASTER


THAN POPULATION SERVED

Through the 12 years between FY1992 and FY2004, U.S. public li-
braries faced a difficult budget picture even as their overall circulation
increased. Signs of strains on budgets are clear and recent years showed
declines in real-dollar income. Revenue increased through 2004, offset-
ting some but not all of the previous real-dollar losses (Table 1).
Summary data from NCES show that the population served by U.S.
public libraries increased by 16.5% through the period 1992-2004, rising
from 243 million to 283 million. Total circulation, meanwhile, increased
by 28.5% to over 2 billion in FY2004. Nationally, circulation per capita
went up 10.3%, rising from 6.4 per year to 7.1 during the period.
Based on these three measures, we can say that in aggregate, demand
for circulated materials in the nation’s public libraries rose through the
period because more people checked out more materials from their pub-
lic libraries.

LIBRARY INCOME

While circulation increased steadily from 1992 through 2004, aggre-


gate income to public libraries experienced a different pattern. In 2003,
various library financial figures declined, but in 2004, the budget fig-
ures largely show increases over the 2003 lows.
In gross terms, then, total library revenues, while not keeping up with
expenditures, increased steadily from $5 billion in 1992 to $9 billion in
2004, an 82% climb.

TABLE 1. Population Served, Total Circulations and Circulations per Capita,


1992-2004

Pop Served Total Circulations Circulations per Capita


1992 243,252,828 1,564,380,576 6.43
2004 283,434,546 2,010,777,017 7.09
% increase 16.5 28.5 10.3
Robert E. Molyneux 103

Income per capita rose still more slowly, going up 52% through the
period, from $20.60 per capita to $32.21 per capita. Moreover, when in-
flation is taken into account, the purchasing power of these per capita
revenues rose only about 15%. The value of these per capita revenues
actually fell in 2003 although they rose again in 2004.

LIBRARY EXPENDITURES

Through the period, total operating expenditures rose 90%. Hence, ag-
gregate library expenditures rose faster than the 82% in new revenues li-
braries obtained to pay the bills. Consequently, library budgeting officials
reallocated available funds: Their general solution was to increase the
percent of total revenues they were spending on operations. Specifically,
operating expenditures as a percent of revenues rose from 90.7 to 94.7%.
That change translated into less discretionary revenue in library budgets.
Given the increases in population and in circulation (used in this article
as a surrogate for all library services delivered), there was a squeeze on
the purchasing power of libraries. That squeeze reached its nadir nation-
ally in 2003 but eased slightly in 2004. When the 2005 and 2006 figures
are available, we will know whether library revenues have kept up with
the demand for operating expenditures or whether they continue to lag.

LIBRARY BUDGET ADJUSTMENTS

In public sector agencies, expenditures must track revenues pretty


closely–you cannot spend what you do not have. However, by varying
the amounts of where money is spent in their annual budgets, library de-
cision makers can adjust to changing conditions. Consider these figures
for increases between 1992 and 2004 for the three major categories of
library expenditures (Table 2).
Collection Expenditures
Collection expenditures, clearly, were hardest hit. The raw figures
fell from 2002 through 2004 while the inflation-adjusted figures peaked
in 2001. “Other” expenditures also fell in 2003.
Figure 1 shows Collection Expenditures in “current” dollars, that is,
dollars as libraries reported annually to NCES. This figure peaked in
104 PUBLIC LIBRARY QUARTERLY

TABLE 2. Percent Increase by Expenditure Category Over FY 1992

Current and Constant 1992 Dollars


2004
(Current) (Constant)
Collections 65.7 22.7
Staff 93.2 43.1
Other 98.9 47.1

2002 at $1.16 billion and fell to $1.15 billion in 2003 and further to
$1.14 billion in 2004.
More telling is Figure 2 where the current collection expenditures per
capita are graphed (solid green line) with constant 1992 dollars (dotted
green line). I have also added two other constant dollar figures: for 2000
and 2002, to highlight the downturn that occurred in this important fig-
ure. As indicated, the data show that per capita expenditures for collec-
tions peaked in 2001 and have fallen each year since then.
Library decision makers lowered the money they invested in collec-
tion development even as the demand on the collections increased.
Expenditures for electronic materials have been tracked only since
1995 but they went up steadily from $22 million in 1995 to over $100
million in 2004. The first year figure is probably low as new variables
are notoriously underreported. The 2004 figure was 35 cents per capita
for these electronic materials, while the figure for all collection expen-
ditures was still over $4 per capita even after declines since 2001.

STAFF EXPENDITURES

Although staff expenditures rose, the total number of library full-time


employees fell marginally both in 2003 and 2004. From 1992 through
2002, the total number of library employees rose about 2,000 a year so
the fall after that is dramatic.
There are three categories of employees reported by NCES. These in-
clude (1) the number of full-time equivalent (FTE) librarians with an
ALA-accredited Master’s degree; (2) FTE employees (without an ALA-
accredited degree) who hold the title of librarian; and (3) other FTE
paid staff. Employees with ALA-accredited masters rose each year.
Librarians without the ALA-accredited degree fell from 45,115 in 2003
to 45,035 in 2004. However “other paid employees” fell in 2003 and
Robert E. Molyneux 105

FIGURE 1. Total Collection Expenditures per Capita in Current Dollars. At Public


Libraries in the United States 1992-2004

Note: Current collection expenditures per capita are graphed as solid green line with constant 1992 dollars
as dotted green line.
Source: Data from annual Public Library Surveys, National Center for Education Statistics

2004 (to 90,977) from its 2002 peak of 91,300. These latter two catego-
ries dragged total FTE employees from a peak in 2002 of 136,219 to
136,014 in 2004.
The implications of the staffing changes are enormous. Libraries
chose to hire degreed staff and to cut back on the numbers of support
staff and non-ALA-accredited library technicians. Degreed staff will
have to pick up on the work done previously by other staff, raising the
hourly cost of that work as it gets accomplished–and probably lowering
per-dollar staff productivity in the process.

OTHER EXPENDITURES

“Other” is that vital category without which libraries cannot operate


effectively. Transportation of materials and facility maintenance are only
two of the specialties that are deferred when “Other” declines as a per-
cent of the budget. Slower public service and declining building condi-
tions are two obvious results of this kind of budget cutting.
106 PUBLIC LIBRARY QUARTERLY

FIGURE 2. Total Collection Expenditures per Capita in Current and Constant


Dollars, at Public Libraries in the United States, 1992-2004

Source: Data from annual Public Library Surveys, National, Center for Education Statistics
Solid green line = current dollars
Blue line = constant 2002 dollars
Red line = constant 2000 dollars
Dotted green line = constant 1992 dollars

SUMMARY

Public libraries appear to be a lagging economic indicator. That is, when


the economy is healthy, tax revenues rise, and, when they rise, library
revenues rise. The economy has been doing quite well the last few years,
so we should expect the NCES data to show improvements in future years.
Optimists will believe that libraries are due for increases because the
economy appears to be growing and tax revenue is growing. Therefore,
revenue will increase. Tax policy is political at all levels of government
and various tax limits and tax cuts have tightened revenue projections
for many states and local governments. In addition, during the revenue
increases in the 1990s, new groups and organizations arose to compete
with libraries for government funds. The next two or three years of rev-
enue figures should tell us whether those cuts have restructured library
revenue to a different level. Library budgets undeniably have tightened.
We will see if lagging revenue allows libraries to catch up with their
increasing outlays for operating expenditures.
Robert E. Molyneux 107

Responding to revenue tightening and to other changes as well, li-


braries cut their collection budgets and the percent of revenue they spent
on “other” recurring expenditures. Many, also, organized campaigns for
tax increases and became more aggressive about fund raising including
writing competitive grants, expanding friends memberships and culti-
vating and soliciting philanthropic gifts. The hottest fund-raising trend
at the moment is to push planned giving aggressively, which may help
in the long term but not immediately.
Library directors and decision makers, in aggregate, faced budget
pressure beginning in the late 1990s and adjusted by reallocating avail-
able income. In general, they trimmed collection expenditures and “other,”
which includes computers, supplies, maintenance and custodial and the
like. In the end, they cut non-professional staff, also.
These budget realities help show why many libraries sought to find
new ways to earn income and initiated or expanded fund-raising pro-
grams to pay for special projects and innovations.
All this fund-raising activity, of course, is occurring as other not-for-
profit organizations, including many that are looking for government
revenue and for philanthropic funds for the first time. In other words,
old establishment public libraries, supported for decades by governments
as essential educational institutions now are being pushed by govern-
ments and taxpayers alike to compete with other cultural institutions
like museums, historical societies and performing arts organizations.
This trend is evidenced by the merging of federal support for museums
and libraries into the Institute for Museum and Library Services, which
by and large utilizes a funding model borrowed wholly from the past
federal experience in museum funding.
The one thing that this article suggests is the importance of watching
statistics that give evidence of how libraries are doing financially. If
you’re an optimist, the appropriate trend is to wait and watch for a
broader revenue stream to catch up for libraries. If you’re a pessimist,
the appropriate activity is to establish or renew relationships with rele-
vant legislators and allocate or raise funds to establish a successful
fund-raising effort. Realists should do both–on the probability that all
the trends discussed here are going to continue to develop as they have
for more than a decade.

Received: 01/07
Accepted: 02/07

doi:10.1300/J118v26n03_05

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