Lowell: Libraries provide value but lack funds

Good morning, Chairperson Takamine and members of the House Committee on Finance.

The Hawaii State Public Library System (HSPLS) is submitting our Fiscal Biennium Budget Request for FY2004-2005 that has been approved by the Board of Education and included in the’ Governor’s executive budget recommendations.

HSPLS has contracted a consultant to determine and measure the value and impact of HSPLS towards Hawaii’s economy. In the first part of his economic impact study, he reports these findings:

1. HSPLS is a substantial business presence in Hawaii. It already pumps over $20M directly into Hawaii’s economy annually in wages, contracts for building repair and maintenance, utilities, etc. Services and resources provided by HSPLS would generate $282M in business annually if HSPLS users had to pay commercial rates for its top six most heavily used services.
2. HSPLS delivers significant value to citizens and families. HSPLS returns over $12 for every state tax dollar invested. We save the average family in Hawaii more than $500 annually if they use library services and resources instead of purchasing those services.
3. The above are only the DIRECT added value of HSPLS’ services. There are no quantitative measures that can be applied to the INDIRECT value the public receives, as, e.g. the child who learns to read, or the jobless person who learns how to write a resume, or learn what jobs are available, or how to start a small business.
4. Although HSPLS provides services at comparable levels to its peers, it is poorly supported compared to these peer libraries, or to national norms. HSPLS needs, an annual sustained increase in revenue of between $7M to $12M to catch up to its peers and to the national norms. This equates to just over $6 per resident of Hawaii, less than the price of a paperback book.

The study concluded “HSPLS is a small, efficient, successful state government agency delivering a high return on taxpayer investment to the citizens and families of Hawaii that is significantly under funded”. Our library patrons expect timely, personalized, quality informational service, up to date materials, easy access, adequate and current technology, as well as shelves full of books and childrens’ story hours. HSPLS’ only product is public service; every member of our ohana understands his/her part in creating and delivering that product.

On December 30, 2002, the Governor imposed a 5% restriction for the current Fiscal year 2003 on all departments. HSPLS came up with a plan that included closing all Public/School libraries to meet this over $1M reduction to our budget. There were many factors that forced us into this very drastic plan, but allow me to discuss the major ones.

First, these cuts came in the middle of our fiscal year after most of our fixed expenses (utilities, dues and subscriptions, contracts, etc.) were already encumbered or expended. This translated into a 15% to 17% reduction rather than just a 5% one based on our available balances. Second, with over 87% of our budget being in personnel, we had no other choice than to look at closing facilities. Finally, this plan to get out of the school campus was already agreed upon in concept by HSPLS, Department of Education, and has been approved by the Board of Education. We hoped to implement this plan over. a 5 to 10 year period, but this latest cut was the only way to “save” a significant amount’ of the 5% in a very short period of time.

After meeting with the Director of Budget and Finance and her staff, the 5%, restriction was reduced to 2.5%, which allowed us to keep these facilities operating. However, with additional cuts being planned or discussed, and with an even higher percentage of our general fund going to salaries, we know we can no longer conduct business as usual, and that we must embark on a different path to accomplish our mission.

HSPLS has appreciated your support in the past and this support must continue as you assess the amount of progress we have made in the past year, and see the changes we are undertaking.

In our Fiscal Biennium Budget Request and emergency appropriation bill, we have included funds for staffing, operating costs, and library materials for the new Kapolei Public Library. HSPLS has asked for $1M in the FY 2003 emergency operating request and $1.7M in FY2004-2005 Biennium Budget Request using the following rationale:

• In February 2002, the construction of the ‘new Kapolei Public Library building was completed. The emergency appropriation is necessary to authorize and cover operating costs such as utilities, supplies, etc., and to build a startup collection of library books and materials.
• Training and orientating new staff, purchasing’ and installing computers for staff as well as public use, and having the collection ready for patrons will take a long time (projected opening date is still 12/03).
• By opening up this new state of the art facility in West Oahu, we will be helping the economy and growth of the second City in Kapolei with new jobs, a community gathering place, and a first class information resource center.

Thank you for the opportunity to present this testimony on our Biennium FY2004-05 Budget Requests.

Ryan Information Management
1049 Ackerman Avenue
Syracuse, NY 13210

January 13, 2003

To:Virginia Lowell, Hawai`i State Librarian
From: Joe Ryan, President, Ryan Information Management
Re: The Value and Impact of Hawai`i Public Libraries Study – Results to Date

The value and impact study of the Hawai`i State Public Library System (HSPLS) you directed Ryan Information Management to conduct found that HSPLS pumps $20 million directly to the economy of Hawai`i, provides over $280 million in market. equivalent services, and saves the average family over $500 a year. That is, a return to the Hawai`i taxpayers of over $12 for every tax dollar invested. The study also concluded ‘however, that HSPLS was seriously under funded in the range of $7 to $12 million annually when compared to peers or national norms.

The study findings lead to two paradoxical conclusions. On the one hand, Hawai`i public libraries are a great value for citizens and families. Citizens have figure this out and Hawai`i public libraries are heavily used compared to their peers nationally. HSPLS delivery of services is on par with its peers, anywhere. On the other hand, by any peer measure, HSPLS is significantly under funded. Clearly, the use and value of Hawai`i public libraries is out of step with their funding. The study’s principal findings are highlighted next.

HSPLS Has a Substantial Business Presence in Hawai`i

HSPLS pumps $20 million directly into the economy of Hawai`i annually in wages and salaries, building repair and maintenance, security services, travel, postage, telecommunications, electricity, refuse service, equipment rental, and fee based services.

HSPLS would generate $282 million in business annually if HSPLS users had to pay commercial rates for HSPLS’s top six most heavily used services (using 2000 data). If that business was thought of as “sales,” HSPLS would be on H’awai’i Business’s annual “Top 250 companies in Hawai`i” list.

HSPLS Delivers Significant Value to Citizens and the Families of Hawai`I

HSPLS returns over $12 for every tax dollar invested. HSPLS saves the average family in Hawai`i, already stretched by a higher than average cost of living, over $500 annually in use of library services and resources (using 2000 data) – not bad for an average per person tax of $19.10 annually, not even the cost of a hardback book!

HSPLS Provides Library Services on Par with Peer Libraries and National Norms

The comparative data clearly indicate that HSPLS delivers quality services to its citizens despite being significantly under-funded. HSPLS serves 47% more patrons on average than its peer library systems and serves more people than those that visit their own libraries nationally, and in peer states and in the best library systems. HSPLS maintains twice as many branches on average and is open 37% more hours overall annually than its peer library systems. The use of materials and reference services is on par with peer systems and states and the national norm. HSPLS circulates 18% more material on average than its peer library systems.

HSPLS Infrastructure Support Weak Compared to Peers

Providing valuable services that are clearly valued, the system’s public face, cannot be sustained if the internal support mechanisms, in particular staff, collection, and information technology support are not continuously nurtured. The diagnostic evidence from the peer comparisons suggest underlying weakness in key infrastructure areas:

Hours: While open more hours, the average, peer system branches are open 600 hours annually or 11.5 hours per week than HSPLS branches.

Staff: HSPLS spends less on staff per capita ($13.84) than either peer systems ($14.02) or the best library systems ($28.95) – $2,637,314 a year less than HSPLS peers.

Collections: Peer states spend twice as much annually per capita on average
on collections than HSPLS does – or $2,228,719 a year more. In 2000, libraries nationally spend twice as much as HSPLS does on videos.

Information technology: As one indicator, nationally libraries are spending twice as much on Internet workstations and peer libraries – three times as much. or $2,637,314 per year more compared to peer states.

Perhaps this discussion may be crystallized by posing the following question: In Hawai`i, its public libraries are heavily used, but are users finding what they want? At the best libraries, people on average are leaving with two items (book, video, DVD, etc.) compared with only one at HSPLS visits. At the best library systems, users find more of what they need than they do at HSPLS because there are more staff to serve, better quality reference and general collections, and more information technology in support.

HSPLS is poorly supported compared to its peer libraries or to national norms

The evident weakness in HSPLS infrastructure is directly due to ongoing under funding. The data make it clear that HSPLS needs an annual sustained increase in revenue of between $7-$12 million to catch up to its peers and to national norms. That is, HSPLS needs each resident of Hawai`i to pay $6 more a year than they do now to catch up to its peer library systems – an increase of less than the price of a paperback book. For $10 per citizen, HSPLS could be on par with national norms for library expenditures.

Study Conclusions

We conclude that HSPLS is a small, efficient, successful state government agency delivering a high return on taxpayer investment to the citizens and families of Hawai`i that is significantly under funded. The study’s data analysis confirms our initial assessment that HSPLS is a good library system seeking to become better. A significant component in the improvement effort must be to reduce the $7 to ‘$12 million annual shortfall in revenue when compared to peer systems. Already, libraries nationally spend twice what HSPLS does on videos or on Internet workstations, peer libraries three times as much. At the best libraries nationally, users find more of what they need than at HSPLS because there are more staff to serve, better quality reference and general collections, and more information technology.

We look forward to working with you during the next phase of the project on providing you with the necessary evidence to effectively obtain the alternative sources of revenue you need. A significant part of that challenge will be to help key internal and external stakeholders imagine the value HSPLS could provide, to Hawai`i if properly supported.

THE VALUE AND IMPACT OF HAWAI`I PUBLIC LIBRARIES

An economic impact study of Hawai`i State Public Library System (HSPLS) found it seriously under funded by state government yet still delivering $20 million directly to the economy of Hawai`i, providing over $280 million in market equivalent services, and saving the average family over $500 a year. That is, a return to the Hawai`i taxpayers of over $12 for every tax dollar invested. HSPLS asked Ryan Information Management, a U.S. national library management consulting firm, to examine HSPLS’s economic worth as part of a larger study. Virginia Lowell, the Hawai`i State Librarian, commenting on the study noted that, “Just as 57% of HSPLS’s materials use is by adults (not kids), it is time to take an adult look at the business of providing library. services to the residents of Hawai`i and the system’s economic value.” The study bad three principal findings:

• HSPLS is a substantial business presence in Hawai`i: HSPLS pumps $20 million directly into the economy of Hawai`i annually in wages and salaries, building repair and maintenance, security services, travel, postage, telecommunications, electricity, refuse service, equipment rental, and fee based services. HSPLS would generate $282 million in business annually if HSPLS users had to pay commercial rates for HSPLS’s top six most heavily used services (using 2000 data). If that business was thought of as “sales,” HSPLS would be on Hawai`i Business’s annual “Top 250 companies in Hawai`i” list.
• HSPLS delivers significant value to citizens and families: HSPLS returns over $12 for every tax dollar invested. HSPLS saves the average family in Hawai`i, already stretched by a higher than average cost of living, over $500 annually in use of library services and resources (using 2000 data) – not bad for an average per person tax of $19.10 annually, not even the cost of a hardback book.
• HSPLS is poorly supported compared to its peer libraries or to national norms: HSPLS needs an annual sustained increase in revenue of between $7-$12 million to catch up to its peers and to national norms. That is, HSPLS needs each resident of Hawai`i to pay $6 more a year than they do now to catch up to its peer library systems – an increase of less than the price of a paperback book. For $10 per citizen, HSPLS could be on par with national norms for library expenditures.

The study concluded, “HSPLS is a small, efficient, successful state government agency delivering a high return on taxpayer investment to the citizens and families of Hawai`i that is significantly under funded, Already, libraries nationally spend twice what HSPLS does on videos or on Internet workstations, peer libraries three’ times as much. At the best libraries nationally, users find more of what they need than at HSPLS because there are more staff to serve, better quality reference and general collections, and more information technology. imagine the value HSPLS could provide to Hawai`i if properly supported.”

Additional project information may be obtained from Craig Nosse <craig@lib.state.hi.us> HSPLS Administrative Assistant & Project Liaison, Hawai`i State Public Library System 465 S. King Street Honolulu, Hi 96813 Phone: (808) 586-3698 Fax: (808) 586-3715.