1. What should be the overall goals of state funding to public libraries?

2. What are the main features of the State Librarian’s currently proposed model for state funding to public libraries?

3. What are the Library of Michigan’s plans for funding the Michigan eLibrary over the next five years?

4. How does the model reflect the needs of smaller libraries and others for networking and continuing education opportunities?

5. How does the model reflect the concept of local public libraries being the best judge of the library service needs of their own communities?

6. How does the Library of Michigan propose to enable the smaller moderately or under-funded public libraries to meet their service needs when the previous model with 1977 PA 89 ensured that the larger more well-funded libraries essentially sustained the viability of the library cooperatives with their large per capita direct contributions to the cooperatives?

Additional points of conversation currently under discussion

A. Why have we been looking at changes to the current model of state funding to public libraries? What is “broken?”

B. What led up to the issuance of the currently proposed model by the State Librarian?

C. How does the Library of Michigan impact the Legislature’s decisions on appropriations to state aid to public libraries?

D. If currently established library cooperatives no longer receive direct state aid to public libraries funds, would they be able to stay established as governmental entities?

E. Can currently established library cooperatives transfer any or all of their assets to 501(c)(3) or other private organizations?

F. If the mechanism for establishing new library cooperatives as governmental entities is not included in any new/replacement state aid legislation, how will new library cooperatives, collaborative organizations, library leagues or other providers of services for libraries be formed?

G. What will/can happen to the pensions and other contractual obligations currently entered into by the established library cooperatives?

H. How long will the process to change legislation for state support of public libraries take?

1. What should be the overall goals of state funding to public libraries?

The goal of state funding for public libraries is enhanced public library service for the residents of the state of Michigan. In the provision of quality library services to those end users – Michigan’s residents – we must strive for equity, accountability, efficiency and sustainability.  Funding from the state should result in measurable outcomes with a benchmark for essential services afforded all residents of the state. It is important that state funding of public libraries be strengthened by clear definition and equity across all districts.

2. What are the main features of the State Librarian’s currently proposed model for state funding to public libraries?

In the currently proposed model, the majority of state aid funding goes directly to public libraries for expenditure on measurable library services that are purposely broadly, rather than narrowly, defined. Those services listed were defined and identified during the state librarian’s advisory committee discussions about public libraries’ outside service needs. These could include connectivity or broadband, technology support, awareness/promotion of public library services including MeL, training, purchase of collections materials, provision of programming, and costs associated with participation in MeLCat or other statewide services.  Any funding designated for up-front direct expenditure on statewide services that benefit public libraries could go toward such things as professional assistance with telecommunications, technology, E-rate, etc.; direct purchase of a uniform number of statewide delivery stops per public library; or other services of direct benefit to public libraries.

Another aspect of the model is a proposed shift of decision-making autonomy to local libraries for expenditure of their directly received state aid funds.  Under the model, the local libraries determine what services and service providers can best meet the needs of their own library community.  The library cooperatives could potentially be subsidized in some fashion for a period of time (currently unspecified) in order to allow them to transition to a free-market mode. The same total funding appropriated into the line for state aid to public libraries would be in play, but the library “market” would then dictate the need for various collaborative, consortial, cooperative, or commercial entities. The libraries would hold these service providers accountable for quality service by having the option to purchase from them or go elsewhere.

Benchmarks and reporting of outcomes are built into the model so there can be a basis for articulating justification to the Legislature for sustained or increased state aid to public libraries appropriations in the future.  A strategic plan, determined every three years by an inclusive advisory council, comprised of an array of public library representatives, would recommend needed adjustments to the benchmarks used to measure outcomes. They would evaluate and recommend revisions as needed:

• eligible local expenditure of state aid funds
• distribution formula adjustments
• where applicable, eligible direct statewide expenditures

The model was put forth in December 2007 deliberately without a specific formula for state aid distribution, asking for constructive input and allowing all a chance to comment.  The State Librarian’s blog is capturing all comments and will continue to do so until March 31, 2008.

3. What are the Library of Michigan’s plans for funding the Michigan eLibrary over the next five years?

While it is desirable over the long term to transition funding of statewide services from federal funds (LSTA) to state funds, it is not the goal to do so using state aid to public libraries funds.  The model suggests that some percentage of the state aid funds may go to support of public libraries from a statewide level, such as (for example) a partial direct subsidy of statewide delivery for public libraries.  The goal of this part of the model is to efficiently achieve measurable and equitably distributed service results for all Michigan public library patrons and residents by direct expenditure of a portion of state aid funds if and when appropriate.

The Library of Michigan's new 5-Year LSTA Plan which started October 1, 2008 after enthusiastic approval from the Institute of Museum and Library Services (IMLS), is based upon our intent to continue to fund the Michigan eLibrary with those federal dollars for at least the next five years. Use of any state aid to public libraries dollars towards enhancements or programming that additionally benefits public library patrons and the residents of their service area would only be supplemental to those federal dollars, not in place of them.

4. How does the model reflect the needs of smaller libraries and others for networking and continuing education opportunities?

The model enumerates training as an eligible expenditure of a public library’s directly received state aid funds, and within that umbrella should allow for the coverage of networking and continuing education opportunities.  Additionally, with increased communication venues, such as web 2.0 applications (blogs, wikis, RSS, etc.), online training opportunities, continued CE offerings from the Library of Michigan, MLA, library schools in the state (U-M, WSU), MLC, and self-supporting cooperatives, in addition to regional and national opportunities, we see many options for support and networking for library staff.

5. How does the model reflect the concept of local public libraries being the best judge of the library service needs of their own communities?

For the past thirty years, language in the State Aid to Public Libraries Act (1977 PA 89) has determined how state aid to public libraries funds have been disbursed and spent. Based upon that legislation, the portion of state aid funds assigned to a library’s service population on a per capita basis was basically divided up into thirds. Only one third has been consistently given directly to public libraries to expend as they see fit. Another third has been spent for them by having them directly awarded to the library cooperatives, up front and without any stated workable mechanism of accountability that would enable the state to ensure the quality of the cooperative services resulting from those annual allotments of state aid to public libraries funds. The final third, which has been awarded only to those libraries that choose to be members of a cooperative, has been inconsistently either required as part of cooperative membership and services or kept by the library under the policy of certain other cooperatives that do not require it. The proposed model is designed to increase local autonomy for how state aid to public libraries is spent.

6. How does the Library of Michigan propose to enable the smaller moderately or under-funded public libraries to meet their service needs when the previous model with 1977 PA 89 ensured that the larger more well-funded libraries essentially sustained the viability of the library cooperatives with their large per capita direct contributions to the cooperatives?

The Library of Michigan is aware that meeting the needs of the smaller more modestly funded libraries is a challenging issue within a model that posits a free-market funding structure for library cooperatives.  The state librarian’s advisory committee did not address a formula for distribution of funds during their meetings, and the model currently proposed for comment does not do so either. It has been acknowledged in the various discussions that a per capita funding formula may not be the best solution for allocating state aid to public libraries.

In my discussions to date, especially in listening to the comments contributed since the proposed model was posted, we have looked at several options for disbursement formulae for state aid to public libraries, and we will continue to be open to suggestion throughout the remainder of the comment period which ends March 31, 2008.

In the meantime, though, consider the following possible scenario:

The chart below shows an alternative to a strictly per capita-based formula, a goal of leveling the playing field for smaller libraries to a significant extent, while still not significantly penalizing larger libraries. Using a model similar to that used by the IMLS to distribute LSTA funds to the states (base plus per capita), we developed the chart to show a comparison of the current distribution to libraries and what the potential distribution could be under a new model.

If an annual state aid to public libraries appropriation totals $10,000,000, roughly 30% of that total could be divided up evenly into base awards to every public library in the state, regardless of the size of their service population. The other 70% of the appropriation could be disbursed directly to each public library on a per capita basis in addition to the base single sum award. Such a formula would provide the smaller libraries with an equitable and viable source of funding that would enable them to choose to support a library cooperative or other consortial entity or league whose services meet their needs or to expend those funds as they otherwise determine according to the needs of their community. That same formula would also give a great deal of flexibility and autonomy to the larger libraries in how they utilize their allotted funds.

To see how this type of disbursement formula might play out in actual allotment numbers for some libraries of various sizes and means, see this accompanying chart:

Distribution Model

Chart legend:
Assuming a $10M appropriation:

• Yellow:
  • Current distribution formula per library
    
• Light Green:
  • 100% per capita distribution
    
• Blue:
  • $7,800 base for every library plus the remainder distributed per capita
    
• Purple and Gray:
  • Same as above but using only $8M of the $10M appropriation for direct distribution to libraries ($7,800 base plus remainder per capita); the other $2M utilized to provide statewide service for all.

Additional points of conversation currently under discussion

A.  Why have we been looking at changes to the current model of state funding to public libraries?  What is “broken?”

Over the last few years, the Legislature has been analyzing all aspects of the state budget to make spending cuts and appropriate funds in a difficult fiscal situation. State Aid to Public Libraries has been cut and remains vulnerable each year.  When asked to justify the need for this funding, legislators look for measurable outcomes and a consistent benchmark of benefit of this funding to the state’s residents.  Upon closer examination, we hear concerns about inequity and inconsistency in how these funds are being distributed and utilized.  In some districts, cooperative services are strong and systems are in place for equitable distribution of services.  In other districts, the choice of services is limited, as is the ability to effect change.  With a new model, we are attempting to level the playing field and minimize pockets of haves and have-nots

B.  What led up to the issuance of the currently proposed model by the State Librarian?

Over the past two and a half years, the State Librarian has visited libraries and cooperatives around the state and had several informal discussions about what is working well and what needs improvement.  She set up a series of more formalized input sessions or “State Librarian’s Town Meetings” from which a list of the most frequently articulated needs arose.  This list includes resource sharing and delivery, online databases, technology support, and coordinated marketing of library services.

C. How does the Library of Michigan impact the Legislature’s decisions on appropriations to state aid to public libraries?

The Library of Michigan strongly supports the need for public libraries and quality library services to the residents of the state. We propose a change in the funding structure in order to raise the level of accountability to the Legislature so that the outcomes may inevitably speak to the effectiveness of the funding.  The allocation of the state budget is a complex annual process during which there is opportunity for the State Librarian to testify as to the benefits produced via state funding.  Others are encouraged to participate in this process as well. We actively engage legislators throughout the year, including those who serve on the Library of Michigan Board of Trustees. The best and most successful advocate for funding for public libraries is excellent library service to the end users.

D. If currently established library cooperatives no longer receive direct state aid to public libraries funds, would they be able to stay established as governmental entities?

As the model indicates, where possible, we would hope new state aid legislation would allow a phased implementation approach.

Existing library cooperatives shall not be dissolved unless the statutory authorization for their existence is repealed, new statutory law dissolves them, or they elect to dissolve themselves.  There are no plans to repeal the statutory authorization for library cooperatives currently in place.  Nor is there any plan to enact new law to dissolve the existing library cooperatives. 

So long as an existing library cooperative continues to operate under the law that authorized its creation, and even if the library cooperative does not receive direct state funding through state aid, it would retain its status as a governmental unit and a municipal corporation for the duration of its existence as a legal entity because that was how it was originally established. 

E.  Can currently established library cooperatives transfer any or all of their assets to 501(c)(3) or other private organizations?

No.  There is no legal mechanism permitting a governmental entity such as a library cooperative to transfer its assets, also known as public property, to a private organization in the absence of some type of contract wherein the private organization provides some type of service to the library cooperative.  A transfer by a municipal corporation of public money to a private organization without express legal authority is contrary to Michigan law.
  

F.  If the mechanism for establishing new library cooperatives as governmental entities is not included in any new/replacement state aid legislation, how will new library cooperatives, collaborative organizations, library leagues or other providers of services for libraries be formed?

New associations, groups, collaborations, etc., will be established privately.  Whether or not obtaining tax-exempt 501(c)(3) status under the Internal Revenue Code of 1986 as a charitable organization is the answer remains unclear.  There may be other organizational establishment options that are better suited to furnishing the needs of members of these organizations. The selection of the establishment mechanism for newly created service providing entities would not be determined or mandated by the state.

 
G.  What will/can happen to the pensions and other contractual obligations currently entered into by the established library cooperatives?

As in the current situation, all pensions and other contractual obligations that have been incurred by the library cooperatives will remain in effect.  It will be the responsibility of the library cooperatives to address their contractual issues.  If a library cooperative decides to dissolve, its legal contractual obligations will have to be resolved under the terms of the contracts and in accordance with its plan of service, if applicable.   

H.  How long will the process to change legislation for state support of public libraries take?

The estimate we have for the legislation to be proposed, commented upon, taken up in committee, and reported out is that it would take until the end of calendar year 2008.  In the meantime, since the appropriation to State Aid to Public Libraries is made to a single line in the Library of Michigan's budget (currently proposed by the Governor for FY09 at $10 million), the process for redefining and strengthening the model for distribution and defining outcomes for expenditure should not alter the appropriation process for state aid to public libraries funding in fiscal year 2009.

Updated 03/04/2008