Of particular concern to all of the parties involved is a maintenance of effort provision governing state funding of local libraries. According to Library Director Kaye, the state provision requires local library funding to be equal to or greater than that of the preceding fiscal year.
Failure to sustain this level of funding, according to the state policy, “will result in the forfeiture of state grants and state funded benefits” to the library.
Kaye wants to avoid that possibility, and, after discussing the matter Tuesday, local officials do too. Because of financial conditions, not only locally but statewide as well, the state is offering an exemption from the maintenance of effort provision for the upcoming fiscal year.
Under the exemption, local funding can be cut to the library but must be reduced at a rate equal to or smaller than the rate of other funded departments and agencies.
School Superintendent Dr. Tommy Pharis said the board’s proposed $36,000 cut to library funding could not meet that requirement since the suggested cut would be approximately 26 percent. The library currently receives $136,000 from the school board and the superintendent has recommended a total of $100,000 in the 2009-10 operating budget. The school system is attempting to cut $1.4 million from its next fiscal year budget.
“I’m only speaking for myself, but I suspect the library will be cut. You are not immune to cuts. No department or agency is,” Commission Chairman Bobby Burns said Tuesday morning.
Chairman Burns said the county’s revenues for the current fiscal year are falling short of what is needed to fund the budget, and next year the county is facing a $1 million deficit.
“We are looking at possible furloughs—maybe even layoffs. This may be an option for you, too, to furlough employees on your slowest day. The library will be cut, but by how much I just don’t know at this time,” Burns said.
As an option for taking advantage of the exemption from the maintenance of effort provision, Library Director Kaye suggested the local governing entities maintain the current level of funding and the library would return the unspent portion based on the amount of money each government needed to balance its budget.
“Have you gotten a legal opinion on that. You could run into problems when the library is audited,” Mayor Richard VanLandingham said. The mayor also requested Kaye get confirmation on how state funding would be impacted if the library reduces its budget and the local funding agencies lower their contributions accordingly.
The library director warned local officials that it may be difficult to receive a definitive answer from state officials since the state has never had to cut a library’s funding because of a breach in the maintenance of effort provision.
Superintendent Pharis voiced his concern about not being aware of the maintenance of effort provision in the past.
“I have a problem promising money I don’t know I have. Once we get our allocations from the state, as we’ve seen this year, they can come back and make additional cuts,” Dr. Pharis said.
The superintendent also noted that if the school board decides to increase the funding for the library one year to cover a particular need, under the maintenance of effort provision the library could lose state funds if the board did not maintain that level of funding the following year.
“That’s a concern,” Pharis commented.
“What should I do?” Kaye asked the local officials since he is running out of time to develop a budget that begins July 1.
“My suggestion is that you plan for the worst case scenario for your budget. The city, and I’m sure everyone here, will do the best we can for the library, but we have to be realistic. On the other hand, we don’t want to lose $200,000 to save $36,000,” Mayor VanLandingham said.
Chairman Burns suggested that Kaye consider charging a library user fee, which was an idea the mayor agreed with.
“Over the last 20 years people have grown accustomed to getting more for free. Sometimes, the users should pay more than those who don’t use the library,” the mayor said.
County Administrator Rusty Moye noted that the county funds the county recreation department with ad valorem taxes but, in addition, charges a fee to participants.
Although the school board has already made known what its cut to the library will be, Kaye does not know how much to expect from either the city or the county. Compounding the situation is the fact that the county operates on a January – December fiscal year while the library, city and school board operate on a July – June fiscal year.
Mayor VanLandingham said the city should be able to let the library know what funding to expect in the next several weeks, but Moye said he was not sure when the county would know.
“Everyone that owns a home is automatically going to get hit with a tax hike of $200 minimum because the state legislature did not fund the homestead tax relief credit. The state did not fund it, but it will be the county that gets blamed for the increase in taxes,” Moye said.
The administrator said the county is usually into August before the tax digest becomes available to finalize its operating budget.
“We’re not going to wait to the last minute. We’re going to get him (Kaye) something. We may have to amend it, but we’ll give you something to work with,” Chairman Burns said.
The library’s local funding comes 50 percent from the city of Cairo, 25 percent from the Grady County commission and 25 percent from the board of education. The total local funding currently is $760,000 and the state funding is $210,629.