Budgeting and Funding

Budgeting

While we tend to think of budgeting simply as the allocation of available money, it is more useful to consider it as a planning process. The library’s strategic plan spells out where the library hopes to go over a period of years. The budget states what the library wants to do this year and addresses the very practical issue of costs.

Because the library board has the legal responsibility for setting the budget, and because the library director and staff have the most knowledge of the day-to-day operations of the library, it is important that both the board and the staff be involved in the budgeting process.

The budgeting process should involve the following steps:

1. Definition of goals and activities. At this point the staff and board think about reasonable goals and activities for the upcoming year without regard to cost. If the library has a strategic plan, its plan for the specific year is consulted. Other problems or opportunities that have arisen are considered. This “dreaming” phase of the budgeting process results in a list of potential activities for the next year.
2. Information gathering. In this page of the process, information on the potential costs of maintaining services and reaching new goals is gathered. This is done in a number of different ways. The current year’s expenses are examined, the rate of inflation is considered, and new equipment or services are priced by checking catalogs or contacting service providers. By the end of this process, the staff and board will have obtained cost estimates for achieving the library’s defined activities.
3. Estimating potential income. During this stage, which often overlaps the information-gathering step, estimates are made of potential income. These include taxes, gifts, grants, revenue from the sale of non-resident library cards, and any other possible sources of funding for the library.

   Overdue fines should not be considered as a source of revenue for the library. These fines should be minimal, as low-income patrons can quickly find themselves shut off from their local library because of unpaid late fees. The public library strives to get materials into the hands of those who need them. The community owns the library’s materials, and every effort should be made to avoid barring access to the library. For help with addressing this issue, please contact your ICfL Public Library Consultant.

4. Comparing costs and income. At this stage, the costs of achieving goals and activities are compared with the library’s potential income. If income exceeds costs, all the goals and activities can be kept. More typically, the costs exceed the potential income, so the process goes to the next step.
5. Adjusting goals and activities. This is the hardest part of the budgeting process because the library board and staff must decide what goals and activities are more or less important than others. Some may have to be deleted altogether from the year’s budget or may have to be scaled back. This is ideally done through a negotiation process with all concerned. Goals and activities that cannot be included fully in the present year can, of course, be reconsidered with the next year’s budget process.
6. Presenting the budget. Once the budget has been determined, it needs to be written out in a form that shows estimates of both income and expenditures.
   • City library boards then need to present this document to the city council for final approval. For more information, see:
     • I.C. § 2607(5)
     • I.C. § 2609
   • District libraries must have a budget hearing that is open to the public. For more information, see:
     • I.C. § 33-2725
   • In both cases, board members should be able to explain in some detail the income and costs show in the budget.

A good budget cannot be written the day before it is due. A full budget process is not something that is completed in just one board meeting. It is best to start thinking about the budget early in the spring, so there is plenty of time to define goals and gather information. The more time that can be spent on the budget, the more useful it is likely to be.

Funding

Once the library’s budget has been approved, it is then the board’s responsibility to ensure that adequate income is available to fund the budget. In the case of levied funds, this means monitoring income derived from taxes and discussing any discrepancies between the levied amount and the collected amount with the appropriate city or county officials.

If the board has established a budget with the assumption that non-tax revenue will be available, it is responsible for developing a program to gain these funds. In some cases, this may mean designing a sophisticated fundraising program; in other cases, it may mean participating in less formal money-raising activities.

While public libraries in Idaho are funded primarily at the local level, it is important for board members to realize that public funding for library services provided by the state and federal government can also have important direct and indirect impacts on the local library’s services. Local board members can play a vital role in the legislative process. For this reason, another important function of board members is to represent their library’s interest as these issues are raised.