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8/27/2007 9:18:00 PM
OPINION: Library consolidation may not save property tax money

Marcus

Morton J. Marcus, an economist, writer, and speaker formerly with the Kelley School of Business at Indiana University

At last we have a commission working to see if we can improve government in Indiana through reorganization.  Former Governor Joe Kernan and Supreme Court Justice Randy Shephard are leading the effort.
 
Some of us are concerned that the commission has been established to find ways not to improve government services, but to cut local government property taxes.  The two goals may not work in the same direction.
 
Public libraries are often cited as ripe for consolidation.  There are 238 of them serving Indiana's 92 counties.  Why is it that Huntington County has but one school district but four public libraries?  Grant County needs eight libraries to serve its needs?
 
The fundamental argument for consolidation rests on the idea that the costs of central services and administration will decline without any deterioration in the quality or quantity of services.  Where are the facts that support this idea?  ?
 
Will expenditure data help us discover economies of scale that argue in favor of consolidation?  In 2006, according to data provided by the Indiana State Library, the Whiting Public Library led the state with operating expenditures of $163.88 per resident.  Whiting has 5,137 people, just a few more than the 5,050 served by the Churubusco library at a cost of $15.86 per person.  Are we to believe these two institutions offer the same services? 
 
Without any disrespect for Churubusco, we could easily believe that Whiting offers a broader selection of services.  Whiting may have more new books, more large print books, more tapes, CDs, DVDs, recordings for the blind and reference tools.  It may be open more hours per week with more trained staff available for consultation.  It could have story hours for children and many computers for patron use.  Should we use Churubusco or Whiting as the standard for libraries serving populations of 5,000 persons?
 
The average per capita library expenditure was $47.49. That made the Hartford City and Brownstown libraries average.  Are they to be the standard others are to emulate? The largest library in the state (Indianapolis-Marion County) had a per capita expenditure of $37.04, just five cents over the much (!) smaller Steuben County public library.  Allen and St. Joseph County public libraries rank 36th and 37th in per capita expenditures, just behind the public library in Oxford (Benton County).
 
There are no apparent economies of scale to be found in a simplistic analysis of the available public library data.  Will the Kernan-Shepherd commission dig deeper before they recommend library consolidations? 
 
Are public libraries among the evil local governments that have propelled property taxes to excessive levels?  From 2001 to 2006, total operating expenditures of public libraries rose by an annual average of 3.1%.  During the same period of time, the consumer price index climbed by 2.6%.  Hence, real library operating expenditures in Indiana (that is adjusted for inflation) increased by an annual average of just 0.4%. 
 
Some citizens are upset because their public libraries have new buildings.  These might be the same people who don't believe in modernized schools or air conditioning for students.  Often they like the looks of the old building and want it preserved despite its inadequacies.  Nostalgia is a potent but destructive force in Indiana.  Hence, such capital expenditures are viewed as unnecessary, foolish, and irresponsible acts by an indifferent and insensitive library board.  Such construction activities may or may not have a bearing on the consolidation question.
 
More important is the role of the public library in modern America.  Are libraries leftover institutions from the 19th century?  Are they needed in the internet age?  Is circulating current movies, popular music, and romance novels the kind of services we want from publicly supported libraries?  What new functions could libraries serve in the 21st century?
 
These are legitimate questions to be answered long before consolidation is considered.  Perhaps the best recommendation the Kernan-Shepherd commission can make is for libraries to enter joint discussions of their futures and to seek ways in which services can be improved, keeping costs increases moderate.  It may not sound like much of a recommendation, but our expectations of the commission may be hyped by our hysteria over property taxes.

Related Stories:
• State panel floats ideas for taming property tax
• Study explores how property taxes could vanish
• Officials from six counties to talk taxation with Daniels
• EDITORIAL: Listen to the commissioners






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