Return on Investment
In 2008, Florida public libraries received $662 million to support all offered services.² This is an increase of 49 percent from 2004 but represents a less than 1 percent change from 2007 funding levels. As stated earlier, in FY09, library funding was cut 6.6 percent to $617 million. See Figure 2. Nearly all of the funding for public libraries is provided locally. See Figure 3.

Figure 2 - Florida Public Library Annual Revenues and Visits

Figure 3 - Public Library Funding by Source 2008

In order to determine the return on public library investment, an analysis method known as contingent valuation was used. This economic method of evaluation for non-priced goods and services looks at the implications of not having the goods/services. Thus this study, as was done in the prior study, considers the implications of not having public libraries in terms of User Investment, Cost to Use Alternatives, Community Economic Benefits and Lost Use Benefits.

Because the amount of time and expenses used to make use of library services is a discretionary one, it can be an indication of the value that library users place on public libraries. In 2008, this User Investment was $2.9 billion, representing a 69 percent increase over the $1.72 billion calculated in 2004.

Another value of the existence of public libraries is the Cost to Use Alternatives if the information was still needed and no public library was available. Over 52 percent of survey respondents indicated that they would use an alternative source. Collectively, these alternative sources would cost these users, according to their estimates, $7.19 billion dollars. This is up from a Cost to Use Alternatives of $4.05 billion in 2004.

The resulting Total Net Benefits to Users – the added cost to use alternatives if no public library existed – is $4.29 billion, an 83 percent increase from the $2.33 billion calculated in 2004. These increases in user costs and costs to replace library services represent not only higher prices from inflation, but also the increased use of computers and online services at public libraries.

Public libraries also generate Community Economic Benefits in the form of wages paid to staff, purchases made by the libraries, spending within the library itself and the additional spending that occurs during trips to the public library. In 2008, these Community Economic Benefits exceeded $1.1 billion.

If public libraries did not exist, users would be forced to find information and materials from other sources – although not all would. According to survey information, 19% of library users stated that they would not seek an alternative or would not know where to find the needed information. These uses result in direct economic benefits for the users, and these Lost Use Benefits, as derived from those users who would not seek alternatives, is estimated at $79 million in 2008. This is less than the $155 million estimated for 2004.

The estimated Economic Return attributable to the existence of public libraries – the Total Net Benefits to Users plus the Community Economic Benefits and Lost Use Benefits – is $6.23 billion for 2008. This is a 113% increase from the $2.93 billion reported in 2004.

Overall, Florida’s public libraries return $8.32 for $1.00 invested from all sources. This is an increase of $1.78 over the return on investment calculated in 2004. See Table 1.

Table 1 - Florida Public Libraries Return on Investment 2004 and 2008 Comparison

One reason for this increase has been the below normal increase in statewide funding of public libraries between 2007 and 2008. Because of the method used in calculating return on investment for public libraries, abrupt reductions in funding levels tend to make the return increase in the short term. This is because the value placed on the libraries by the public will tend to lag behind the actual ability of the libraries to provide service. As investment shrinks, there will be a gradual deterioration of services to the point where the value placed on these services and obtained from these services will also suffer.

² This figure does not include approximately $6.5 million used to support multi-type library cooperatives. While FY2009 total revenues and visits are included in Figure 2, detailed data was not available for in time for analysis.