Appendix X – Glossary of Terms

The below terms are those defined in Taxpayer Return on Investment in Florida Public Libraries: Summary Report, September, 2004. The present study is an update of this prior study and thus is using the same definitions for the terms.

Benefits: The positive outcome or gain from public library use or from the library’s existence/availability in a community. The “benefits” used in the REMI model and analysis are discounted benefits.

Benefits to the State of Florida: The amount leveraged by the investment in public libraries from public (federal, state and local) funding sources. It is the measure of the gain from these funds.

Benefit/Cost Ratio (B/C): The relationship between the benefits derived from the use or existence of the public library and the cost to taxpayers to make the libraries available.
Specific B/C ratios identified in the report are:

B/C (Availability): The relationship between the benefits derived from the availability of the library and the cost of the libraries to taxpayers.
B/C (Use): The relationship between the benefits derived from use of the library and the cost of the libraries to taxpayers.
B/CREMI(Wages): The relationship between the benefits in terms of wages resulting from the existence of the public library and the cost of the libraries to taxpayers.
B/CREMI (GRP): The relationship between the benefits in terms of GRP resulting from the existence of the public libraries and the cost of the libraries to taxpayers.

Community benefits: These are benefits to the community in which the public library is located and can include library expenditures, library user expenditures, jobs, income, etc.

Community economic benefits: These are benefits that flow from the public library such as library spending with vendors, contractors, etc. in the state; revenues generated by vendors and contractors in the library (e.g., copying, coffee shop, gift shop) and spending that occurs as a result of library use (e.g., restaurants, stores, coffee shops).

Compensation: The salaries/wages and benefits (vacation, sick leave, medical insurance, etc.) for employees in public libraries and other sectors.

Costs: The value or level of resources invested and used to provide a service or produce a product. As used in public library benefit and cost ratios, the cost is either the investment or cost to taxpayers, or the discounted costs used in the REMI model and analysis.

Cost to use alternatives: The estimated costs to use alternatives to the public libraries should they cease to exist, and should users decide to pursue alternatives (measured in terms of time and other expenditures).

Contingent valuation: An economic method of evaluation of (public library) services (and non-priced goods) that looks at the implications of not having the services.

Direct benefits: Positive outcomes resulting from public library use; may include those that can be expressed in economic terms (e.g., time saved) or in other ways (e.g., broadened my knowledge).

Direct economic benefits: Positive outcomes resulting from library use that can be expressed in economic terms (e.g., time and money saved)

Direct effects: The result from the expenditures on/investments in public libraries on goods and services aggregated over the state of Florida. It focuses on receiving industry sectors, businesses and other organizations.

Direct in-state expenditures: Expenditures by the public libraries on goods and services from in-state providers. These may include books, periodicals, electronic equipment, supplies, etc., as well as capital projects (construction, renovation, etc.).

Discounting: The process of estimating the real value of the future amount of money in today’s equivalent worth. For example, the value of a public library’s current monetary benefits and investment or costs will likely be different at any future period of time.

Economic return: The results of public library use that can be expressed in economic terms.

Gross Regional Product (GRP) or Gross County Product (GCP): An indicator of the economic well-being of an area measured in terms of the total economic output or the value of all goods and services produced.

Halo spending: Public library users often combine trips to the public library with other activities such as shopping, eating at restaurants, etc. The spending by users in these activities is referred to as “halo” spending. If there were no public libraries these other activities and corresponding spending would decline to some degree.

Indirect effects: The value of inputs used by businesses and other organizations that are called upon to produce additional goods and services for those organizations first impacted directly by library spending.

Induced effects: The result from the direct and indirect effects of library spending. Induced effects are related to persons, businesses or other organizations that receive added income as a result of community and statewide spending by employees of the firms that are imputed by the direct and indirect effect of library spending.

Investment:
Revenue investment: The revenues received by the public libraries including federal, state and local funds; fees and fines; cash gifts and donations; and funding for multi-type library cooperatives.
User investment: The investment by users in their time, travel, purchases, etc., necessary to use public libraries or specific services.

Lost community benefits: Community economic benefits that would be lost if the public libraries did not exist.

Lost use benefits: Benefits derived from use that would be lost if the public libraries did not exist.

Net benefit: The added cost to use alternatives to the public library

Net present value (NPV): Discounted benefits minus discounted costs.

Opportunity costs: The resources diverted from other uses to make a program or service possible. One measure of opportunity cost is the initial public library investment assumed to be redistributed to alternative government spending activities.

Pass through spending: Some public libraries have business-like operations in their facilities such as coffee shops, gift shops, etc. Revenue produced by these operations that is passed on to non-library owners, vendors or charities is referred to as pass through spending.

Present value: Present value uses discounting to determine the spot cash equivalent of a future value where the future value is known and the present value is not.

Public library investment: The amount of public investment made from taxes and capital outlay.

Return: What is gained or lost as a result of the existence or use of the public library. A positive return is a benefit; a negative one is a detriment.

Return on investment (ROI), also Return on public library investment: The relationship between the total economic benefit and the total investment in public libraries

REMI: Regional Economic Models, Inc. (REMI) is an integrated input-output and econometric model that was specifically used for the State of Florida. It traces linkages among industry purchases and sales and forecasts future changes in business costs, prices, wages, taxes, etc.

Revenue investment: (see Investment).

Total lost compensation: The salaries and benefits currently received by public library staff that would be lost to those individuals (at least in the short term) if there were no public libraries.

Use benefits: (see Benefits).

User Investment: (see Investment).