How Are Public Libraries Funded? (And Why They're Free to Use)

Q: Are libraries funded by taxpayers?

Yes, overwhelmingly. Analysis of federal IMLS survey data puts local government at about 86% of public library revenue, state government under 7%, and the federal government 1% or less. The local share is mostly property taxes, sometimes through a dedicated library taxing district that appears on local ballots. Libraries are funded much like public schools and parks.

Q: How do libraries make money?

Mostly they're funded, not self-financed. About 86% comes from local taxes, under 7% from state government, and 1% or less from federal sources. A remaining 7% is other: fees, fines (many libraries are now fine-free), grants, donations, and money raised by Friends of the Library book sales. Borrowing is free because the community pays collectively through taxes.

Q: How much federal funding do libraries get?

Very little as a share, 1% or less of total public library revenue. The main federal source is IMLS, which routes most library money through the LSTA Grants to States program, funded at 180 million dollars in FY2023 and FY2024. That small slice pays for outsized statewide services like databases and summer reading, but day-to-day budgets rely on local taxes.

Where the money actually comes from — the local, state and federal split — and why your library card costs you nothing at the desk.

By the Public-Libraries.com Editorial Team · Updated September 29, 2026

In this guide

Where the money comes from
How the local ~86% is actually raised
The federal role: small but visible
The 2025 federal funding fight
So why are libraries free?

Quick answer: US public libraries are funded overwhelmingly by local taxpayers. Analysis of federal survey data puts the split at roughly 86% local government, under 7% state, 1% or less federal, with about 7% from other sources like fees, grants and donations. That local tax base is exactly why libraries are free to use — you've already paid for them collectively, so there's no charge at the desk for a resident with a card.

Where the money comes from

When people ask "how do libraries make money," the honest answer is that they mostly don't make it — they're funded, like fire departments and public schools, primarily out of local taxes. According to the Institute of Museum and Library Services (IMLS), the federal agency that surveys every public library in the country, US public libraries took in $14.2 billion in total revenue in fiscal year 2019, of which 85.9% came from local funding sources (IMLS Public Libraries Survey, FY2019).

The American Academy of Arts & Sciences, which reprocesses that IMLS data, breaks the full picture down: in 2018, local government provided about 86% of public library revenue, state government less than 7%, and the federal government 1% or less, with roughly 7% coming from other sources such as fees, fines, grants and donations (Humanities Indicators). Notably, libraries have grown more dependent on local money over time: in 1995 the split was 78% local and 12% state, so the state share has nearly halved.

Funding source	Share of revenue	What it means
Local government	~86%	Municipal & county taxes, library districts, millage/levies
State government	under 7%	State aid, statewide database subscriptions
Federal government	1% or less	Mostly IMLS/LSTA grants routed through state library agencies
Other	~7%	Fees, fines, grants, donations, Friends groups

Figures: local/state/federal split from Humanities Indicators (2018) analysis of IMLS data; aggregate revenue and local share from IMLS FY2019. The two years are consistent with each other.

How the local ~86% is actually raised

IMLS defines local revenue as "all local government funds designated by the community, district, or region... for library use." In everyday terms, that's property taxes — either as part of a city or county budget, or through a dedicated library taxing district that levies its own millage. This is why library funding can appear on your local ballot: many communities vote directly on library levies. In FY2019, total operating revenue worked out to about $44.88 per person nationwide.

The remaining slice — the roughly 7% "other" — covers the things people often assume fund libraries but don't, in bulk: overdue fines (many systems have gone fine-free anyway), printing and meeting-room fees, competitive grants, and donations, including the money raised by Friends of the Library book sales.

The federal role: small but visible

The federal government is the smallest funder, but it plays a specific role. The Institute of Museum and Library Services (IMLS) is the main federal source, and it distributes most of its library money through the Library Services and Technology Act (LSTA) "Grants to States" program — population-based formula grants sent to all 50 state library agencies (IMLS). LSTA Grants to States were funded at $180 million in both FY2023 and FY2024, out of a total IMLS appropriation of about $294.8 million (IMLS budget table). Set against $14 billion-plus in total public library revenue, that's why the federal share rounds to about 1%. But that small slice funds outsized things — statewide databases, summer reading, broadband and rural programs — that individual libraries couldn't afford alone.

The 2025 federal funding fight

Federal library funding became national news in 2025. On March 14, 2025, an executive order directed that IMLS's non-statutory functions be reduced "to the maximum extent consistent with applicable law," after which the administration moved to terminate grants and place staff on leave (ALA). A coalition of state attorneys general sued, a federal court in Rhode Island issued a preliminary injunction in May 2025, and in November 2025 the court struck down the effort to dismantle IMLS; the agency then reinstated the previously canceled grants in December 2025 (ALA).

Still evolving: the future of federal library funding remains politically contested — later budget proposals have again sought to eliminate IMLS. Because the federal share is only about 1% of total funding, the immediate impact on most libraries' day-to-day budgets is limited, but the statewide services LSTA pays for are more exposed. Check current reporting for the latest status.

So why are libraries free?

Because the bill is paid collectively, up front, through taxes — chiefly local ones. A public library is a shared resource funded by the community it serves, so a resident with a library card pays nothing at the point of use to borrow books, use computers, or attend programs. It's the same logic as a public park or a public school: free to use precisely because everyone chips in through taxes. For the scale of what that funds nationally, see our companion piece, US public libraries by the numbers. IMLS data shows nearly 97% of Americans live within a public library service area — a genuinely universal, tax-funded free service.

Frequently Asked Questions

Are libraries funded by taxpayers?

Yes — overwhelmingly. Analysis of federal (IMLS) survey data puts local government at about 86% of public library revenue, state government under 7%, and the federal government 1% or less. The local share is mostly property taxes, sometimes through a dedicated library taxing district that appears on local ballots. Libraries are funded much like public schools and parks.

How do libraries make money?

Mostly they’re funded, not self-financed. About 86% comes from local taxes, under 7% from state government, and 1% or less from federal sources. A remaining ~7% is “other” — fees, fines (many libraries are now fine-free), grants, donations, and money raised by Friends of the Library book sales. Borrowing is free because the community pays collectively through taxes.

How much federal funding do libraries get?

Very little as a share — 1% or less of total public library revenue. The main federal source is IMLS, which routes most library money through the LSTA “Grants to States” program (funded at $180 million in FY2023 and FY2024). That small slice pays for outsized statewide services like databases, summer reading and rural programs, but day-to-day budgets rely on local taxes.

Why are libraries free to use?

Because they’re paid for collectively, up front, through taxes — chiefly local property taxes. A public library is a shared community resource, so a resident with a library card pays nothing at the point of use to borrow items, use computers or attend programs. It’s the same model as a public park or public school: free to use because everyone contributes through taxes.

What happened to federal library funding in 2025?

A March 2025 executive order sought to shrink IMLS, and the administration began terminating grants. States sued; a federal court issued an injunction and, in November 2025, struck down the effort to dismantle IMLS, after which the agency reinstated the canceled grants in December 2025. The situation remains contested in later budget proposals. Because federal money is only about 1% of funding, most libraries’ core budgets were not immediately affected, but statewide LSTA-funded services are more exposed.

Public-Libraries.com Editorial Team

Public-Libraries.com is an independent, reader-supported directory of every U.S. public library. Our editorial team compiles verified hours, services and resources from official sources — see how we verify our data.