Officials: Indiana libraries expect to face financial challenges at state and federal levels

Yahoo

11-05-2025

Local libraries in Indiana will face financial challenges in the years ahead as the state and federal governments make drastic cuts to funding, local officials said.
At the state level, libraries will see budget cuts amid the state budget and property tax reform. At the federal level, the Institute of Museum and Library Services funding was gutted, which will cut millions from the state library budget, said Julie Wendorf, the director of the Crown Point Library and president of the Indiana Library Federation board of directors.
'Libraries have been functioning in the state of Indiana since the late 1800s and doing the work in their communities. It's sad that we're under fire like we are right now,' Wendorf said.
Under Senate Enrolled Act 1, the property tax relief bill, libraries across the state will see a decrease of $18.6 million in 2026, $26.1 million in 2027 and $24.2 million in 2028, according to the bill's fiscal note.
Beginning in 2028, municipalities will have the option to raise the local income tax to 2.9% but libraries would only receive 0.2% of that revenue, Wendorf said.
Under the new local income tax structure, Wendorf said libraries will be 'significantly' impacted because some libraries in the state receive about half of their budget through local income tax as opposed to property taxes.
'This would hit them because they would actually get less of that local income tax distribution,' Wendorf said.
In Lake County, libraries currently don't receive local income taxes because the county reserves all the local income tax at the county level, Wendorf said.
With Lake County Council approval, local libraries have the opportunity for a portion of local income tax revenue starting in 2028 but 'it would certainly not be a dollar-for-dollar replacement,' Wendorf said.
Further, Wendorf said the libraries will share their portion of local income tax with other eligible units.
'For literary illustration, does it become a 'Hunger Games'? We're not really sure how that's going to work. We haven't really heard any answers on that yet. I think they have a lot to do to figure out how they are going to handle it. I think that's why they've pushed it off, so they have time to figure it out,' Wendorf said.
In addition to the decrease in revenue on the property tax end, Wendorf said libraries saw cuts in the state budget House Enrolled Act 1001, which Gov. Mike Braun signed Tuesday.
The state library saw a $1.1 million decrease from the 2023-2025 biennial budget to the 2025-2027 budget. Further, the library saw millions in program cuts, according to the budget document.
In the previous state budget, the state library received approximately $3.7 million, while in the recently approved budget, the state library received $2.6 million, according to the respective budget documents.
The 2025-2027 budget also removed funding for the Indiana Academy of Science, the historical marker program, Inspire, local library connectivity grant and others that were previously funded. The inspire and connectivity portions were removed in the final 24 hours of the legislative secession, Wendorf said.
'(The budget) really impacts the state library, and the state library in turn provides a lot of services to public libraries. There's a hidden hit to public libraries in that, that the state library won't be able to perform those services for us and we'll have to pay for those services or source them elsewhere,' Wendorf said.
For example, the state library helps with transportation of books throughout the state, Wendorf said, which allows libraries to borrow books from other libraries. That process helps libraries receive books visitors request without buying the book, she said.
By removing the local library connectivity grant, Wendorf said the Crown Point Library – which doesn't receive the largest funding – will have to pay $13,000 more for internet services next year.
Libraries will maintain internet services because it's a basic need the libraries provide, but that means other areas of library budgets will be impacted, Wendorf said.
Inspire is a collection of databases for K-12 students to help them with workforce development and research, Wendorf said. Officials with the state library have said it will move the Inspire cost, about $1.3 million, into its operating budget, which means there's even less money for the state library to further support local libraries, she said.
Porter County Public Library System Director Jesse Butz said it's difficult to understand the full impact the state budget and property tax relief will have on libraries because of the various moving parts.
'What we're focused on is what we always focus on, which is we're a very fiscally conscious library system in general. We use zero-based budgeting. We run a lot of data, a lot of metrics, and we alter our services in response to budgetary constraints,' Butz said. 'There will almost certainly be some sort of modifications we'll need to put in place. But until we know these numbers officially, it's tough to say what those 100% will be.'
Further, at the federal level, the IMLS was defunded, which further hit the state library's budget by $3.5 million, Wendorf said. That reduction in the IMLS funding will 'cascade' down to local libraries, she said.
'It's really a domino effect. There's so many small dominoes and they are all falling in the wrong directions on top of libraries,' Wendorf said.
The impact on local libraries will depend on how the state library responds to the state and federal cuts, Butz said.
For example, under the state's digital library, Butz said the state library pays $70,000 annually for the platform fee and the member libraries pay for materials. If that ends, Butz said the libraries would have to pay more to maintain their e-book collections, he said.
'There's all these ways in which they are able to support us that are kind of hidden. Until they are able to decide, or at least prioritize and triage, what they need to, we won't know which, if any, will actually impact us,' Butz said.
Under state law, libraries aren't allowed to have a capital fund and a limit on reserves, Wendorf said. That means, Wendorf said, that libraries don't have 'a cushion' for funding.
With all these fiscal impacts, Wendorf said library officials will have to choose between buying fewer materials, reducing hours and services, and cutting staff.
'There are many ways, and it will be unique for each library in how they are able to best deal with that in their community,' Wendorf said.
The impact of libraries in Indiana has been significant, Wendorf said. In 2023, 39 million materials were checked out, which equates to 557 books per seat at the Lucas Oil Stadium. That same year, 117,000 programs were hosted, which is 152 programs per point scored by Indiana Fever Guard Caitlin Clark in 2024, and there were 20.6 million WiFi uses, which is equivalent to the number of 'Off the Wall' albums sold.
In 2023, there were approximately 21.5 million library visits, which is more than four times the amount of corn acreage harvested in Indiana that same year. That same year, 15 million digital materials were checked out, which is more than double the population of Indiana, Wendorf said.
Library officials throughout the state testified before legislators about the importance of libraries throughout the session, Wendorf said.
'It just was falling on deaf ears,' Wendorf said.
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