Saturday, August 10, 2002

Library didn't see squeeze coming


System worked on projects as Ohio prepared sharp cuts

By Gregory Korte, gkorte@enquirer.com
The Cincinnati Enquirer

        When the Public Library of Cincinnati and Hamilton County announced the closure of five branch libraries last month, the sudden news hit library patrons like a ton of books.

        But in retrospect, the library's funding crisis has been more than a year in the making.

        During that year, the library embarked on ambitious capital projects in Harrison, Clifton and Reading, gave librarians across-the-board raises of 3 percent (and almost 6 percent for top staff), and otherwise continued operating with little outward sign of the financial troubles ahead.

[photo] The Schrarer family reads at the Anderson branch library, one of the busiest in the system.
(Craig Ruttle photo)
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        The board voted July 15 to close the Bond Hill, Deer Park, Elmwood Place, Greenhills and Mount Healthy branches in an attempt to save $2.2 million next year. Those branches were selected mostly for their small size and proximity to other branches, the board said.

        The board has since backed off the branch-closing plan, promising to hold public hearings before moving forward. The first hearing is Aug. 27 at 7 p.m. at Mount Healthy High School.

        Library officials admit they may have underestimated the public response to the closings. Five closings at once were probably too much to spring on the public, the library's director said.

        Indeed, while budget cuts affect all of Ohio's 250 library districts, only one other branch in the state — North Canton's Greentown branch — has been subject to closing thus far.

        Still, Cincinnati's library has always held itself to be unique, and some of those singular qualities have also made it more vulnerable to deep cuts:

        Cincinnati has one of the top 10 circulating libraries in the United States, ranking second in total holdings at 10.4 million. And it's well-used, with the average card holder checking out 33.7 items a year.

        Hamilton County gets far more state library funding per capita than any county in the state — a disparity the state has been trying to gradually rectify since 1986. Still, Hamilton County gets $58.81 per person in state library funding. The state average is $40.24.

        Of the 10 largest libraries in the state, only Hamilton County receives no local property tax money, making it more vulnerable to the vagaries of the boom-or-bust state income tax. The Cleveland Public Library gets 40 percent of its budget from a 4-mill property tax, and the state cuts will result in no immediate cutbacks in service, Cleveland librarians say.

        Cincinnati has more employees (the equivalent of 781 full-time workers) and more branches (41) than any other library system in the state. It also spends more on payroll ($33 million). That means more overhead and higher operating costs.

        Cincinnati's library funding predicament has some library board members quietly floating the idea of a countywide tax levy to soften the impact of the state cuts.

        “It's one of the options down the road,” said Charles Lindberg, a library board member.

        By most accounts, the Public Library of Cincinnati and Hamilton County is well run. Since 1999, the state auditor has issued just three “management letters” recommending minor changes in accounting.

        So how, then, did the library get into these financial straits?

        The story starts in 1986, when the state changed the way libraries are funded. For the previous 55 years, libraries received money from an “intangibles tax” on stocks, bonds and other financial instruments. With Cincinnati's status as a regional center for banking and insurance, the local library benefited handsomely.

        When the state abolished the tax in 1986, lawmakers replaced the library funding by earmarking 6.3 percent of personal income tax receipts to libraries. Cincinnati got more than its fair share, in recognition of the historic support it had gotten from the state.

        Since then, the state has tried to wean Cincinnati's library off its largesse. State funding for libraries grew 73 percent from 1992 to 2000. For Cincinnati, it grew 41 percent.

        In June 2001, faced with an Ohio Supreme Court mandate to spend more on schools, the state legislature tinkered with the library funding formula. It capped funding at 2000 levels and took money for the Ohio Public Library Information Network — previously its own line item — out of the fund that supports local libraries.

        Then, with state income tax revenue dropping 7 percent, the General Assembly went further, again tying library support to the now-falling tax revenues. Monthly tax payments would be adjusted twice a year based on collections.

        During one of those adjustments in June, the Ohio Department of Taxation discovered that it had overestimated the strength of the economy, and cut future library distributions even further to account for the prior overpayments.

        The effect was dramatic: The library will receive $3.1 million less over the next six months compared to the same period last year. Combined with other cutbacks, the total reduction is $4.3 million this year.

        “We were prepared for the situation this year, and we responded by delaying some capital projects,” Mr. Lindberg said. “We were not prepared for a July out-of-the-blue cut.”

Criticism from Portune

        If the library board wasn't prepared, it should have been, said Todd Portune, a Hamilton County commissioner.

        The library approved rent increases and extended leases on its Greenhills and Deer Park branches as late as April.

        The library's 2002 budget, submitted to the county auditor in May, reflected overly optimistic state funding of $65.7 million. (It's now projected at $48.3 million.) Library officials say they always overestimate, because they don't want to pass up the money.

        By June, as the library started to realize the seriousness of its financial outlook, the board instituted a hiring freeze.

        But while the impact on the library was sudden, the state budget cuts and falling economy weren't a closely guarded secret, state officials said.

        “If the issue is, "We didn't know,' then I can't see how they could not have known,” said Gary Gudmundson, a spokesman for the Ohio Department of Taxation.

        “The General Assembly was involved in a pretty public process of trying to plug a huge budget deficit, and the libraries have an organization that ostensibly monitors the actions of the General Assembly,” he said.

        Closing branches would have an almost insignificant impact on the library's 2002 budget, because two of the branches are tied up in long-term leases until August 2003: Deer Park at $45,155 a year and Mount Healthy at $14,400. The system owns the Bond Hill site, and employees from those branches would fill other vacant positions in other libraries. Thus the real savings are in utility costs, security and landscaping.

        The Cincinnati library district carries no debt. And while county officials aren't prepared to say that's a bad thing, financing some construction projects could help save the district money until revenues rebound, Mr. Portune said.

        Even with the cuts, the district is moving forward with a $709,860 plan to build a new St. Bernard Branch, to replace the St. Bernard and Elmwood Place branches.

A question of direction

        Indeed, underlying the controversy over the short-term future of the branches is a debate about the long-term direction of the library.

        “Down the road, where is this library system going to go? Are we going to stay with small community libraries and make sure those 17 small local subdivisions that don't have libraries get them? Or is the future in high-tech libraries that have to be large and, by necessity, regional?” Mr. Lindberg said.

        The library's recent projects — expanded branches in Northside, Symmes, Anderson and Harrison, while closing Lincoln Heights — suggest the direction is regional.

        That debate should be public, Mr. Portune said. Instead, the library has operated as its own fiefdom for so long that it has become virtually blind to public opinion — as evidenced by the reaction to the branch closing plan, he said.

        “It's a body that is very resistant to having anyone looking over its shoulder in term of what it's doing. That's pretty evident in how this decision was made and how they've handled the fallout,” he said. “I hope they're learning from it.”

        The library closings have even become an election-year issue, with candidates for county commissioner also getting into the act.

        Republican Phil Heimlich and Democrat Jean Siebenaler both say they oppose the branch closures — and any new tax to keep them open. Mr. Heimlich said he wants to look over the library's books to see if they're spending their money wisely. Dr. Siebenaler said she would strengthen the lines of accountability by appointing different people to the library board.

        Library board members, unused to being second-guessed by elected officials, are bristling.

        “Mr. Portune doesn't have a thing to do with libraries other than to decide for one reason he wants to make it an issue,” Mr. Lindberg said. “Remember, we are talking about one of the finest library systems in the country; and I get a little upset when a politician suggests he has all the answers, and he doesn't.”

       



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