The current methodology used to figure the Indiana University (Bloomington) Libraries materials budget has been used for many years. This paper explains the current methodology and explores some alternative methods for allocating the funds.

I. The Current Methodology

The driving force behind the current method of allocating the budget is the expenditures for serials. Unlike other universities or colleges where serials subscription costs may be paid from a single large fund, the methodology which was chosen for Indiana University treats serial expenditures as one component of a two-part materials fund. Each of the so-called programmatic funds (e.g., history, English, chemistry, women's studies, etc.) has to pay for both books and serial subscriptions from the allotted budget.

The current methodology can be traced to 1974/75 when serials funds were split from a single pot of serials money. In transmitting the 1975/76 materials budget, then-Associate Dean of Libraries William J. Studer wrote of the serials and book budgets,

These budgets must be delineated separately but are actually two interactive parts of a whole, i.e., together they form your library materials budget; and they must be so viewed in order to be fully understood. The book budget is governed by serials requirements, which in fact determine how much is left for books.

This was and continues to be the guiding theory behind the management of the IUB Libraries materials budget. Since 1974, the Libraries materials budget has experienced the effects of three major periods of journal cancellations (in the mid-70's, late 70's, and mid-80's).

The current methodology works this way:

1. The total serials payments for the previous fiscal year have added to them an inflation factor. (See Appendix I for percentages used over the years.)

2. The projected serials costs to be paid in the new fiscal year are compared to the established total budget for the given fund. Three scenarios are possible:

a. the projected serials costs are less than the total budget, in which case the excess goes into the book portion of the budget.

b. the projected serials costs equal the budget. No books can be bought that year.

c. the projected serials costs exceed the budget. Obviously, no books can be bought. The fund manager is expected to cancel sufficient numbers of jounals to bring the budget into balance.

II. Alternative Budget Allocation Plans.

In this section are presented some alternative budgeting plans.

A. Single Serials Fund Limited to Core Journals.

It is much easier to handle large inflationary increases for certain serials if the fund of money from which they are paid also includes serials which experience little or no cost increases in a given fiscal year. For every discipline there exists a core of journals which no one would consider cancelling. If that is the case, why should it be necessary to consider them in the context of the budgets of individual disciplines? These are core materials, essential to the research and teaching efforts of the university, and they must be supported at all costs. The university's budget officers and the librarians should put the highest priority on funding the subscriptions to these journals. Therefore, they should be paid from a single fund whose costs would be easy to track from year to year. Other journals could continue to be assigned to individual funds. It would be necessary for each fund manager to work with the appropriate faculty to reach agreement on the core list of journals. Specific guidelines should be developed for that purpose.

B. Single Monographs Fund Limited to Core Books.

It is very imprudent to follow a budgeting practice which results in no books being bought for certain funds in certain years. Each year there are books which are published in every discipline that are so important as to merit a place in every university library which supports those disciplines. A unified core monograph fund of money could be created to allow the purchase of such materials. Again, it would be necessary for fund managers to establish guidelines and to exercise judgment and restraint in order to insure the stability of this approach.

C. Equal Reductions in Purchasing Power for Both Books and Journals.

If we assume that the materials budget will never again keep pace with the inflation rate for materials, an egalitarian approach would be to reduce the purchasing power of all funds according to the inflation rates for the separate disciplines. Whenever the annual increment in the Libraries materials budget falls behind inflationary cost increases for the materials, some penalty must be paid. In the absence of a clear policy decision calling for the reallocation of the resources, annual budgeting should be aimed at bringing about equal reductions in purchase units in all libraries.

The procedure would involve the following steps:

1. Determine the inflation rates for both books and journals in each fund.

2. Compute the funding required to maintain constant purchasing power in each, that is, the inflated budget.

3. Add all of the inflated budgets for all funds and determine the amount by which the total exceeds the new materials budget. Express the shortfall as a percentage of the inflated total.

4. Decrease each fund's inflated budget by the shortfall percentage in order to determine the new funding level.

If the inflation rate for serials consistently exceeded that of books over a period of time, the net result would be to shift more funds into the serials budgets. However, it would still retain one essential feature of the present system -- the forced reduction of serial subscriptions when the available funds are insufficient. The major difference is that the forced reductions would be equally shared by book and serials portions of each fund with respect to the reduction in purchasing power.

D. Significant Reallocation of the Libraries Materials Budget.

A task force of librarians and faculty attempted in the summer of 1988 to define reasonable criteria by which to allocate the materials budget. Their report concluded that funding of research materials beyond the level for basic research collections should reflect the importance of the program or discipline to the university. The basic research collection should satisfy roughly 75 percent of the research needs in any discipline supported by IU. It was suggested that programs which clearly rank among the top ten percent of departments/schools in the nation should expect that approximately 90 percent of the need for materials would be satisfied within the IU system libraries. Thus, all researchers, depending on the importance of their departments or programs to the university, should expect that a certain percentage of their research needs will be met by access to materials or databases which are not physically housed at IU. Depending on the importance of their departments or programs to the university, from 10 to 25 percent of that need would be satisfied by access to information sources outside the IU Libraries system. The key to such an approach is a clear signal from the IU administrators as to what programs or disciplines should receive the greatest support in the materials budget. If such an approach is to succeed, we must provide equal access for all to material which is not held by the IU Libraries system. This implies that an adequate portion of the Libraries materials budget will continue to be used in support of such access services.

E. Other Approaches.

Appendix II consists of pp. 9-10 of a draft document entitled "Guide to Budget Allocation." It was issued June 6, 1988 by Carolyn Bucknall, Chair of the American Library Association's Resources and Technical Services Division, Collection Management and Development Committee, Subcommittee on Budget Allocation. Several general approaches to allocating library materials budgets are summarized on those pages.

                           Percentage Applied To Serials in:
Fiscal Year            Sciences(a)      Humanities, Social Sciences

  75/76                   20%                   15%
  76/77                   15                    10
  77/78                   15                    10
  78/79                   15                    10
  79/80                   12                     8
  80/81                   17(b)                  8(b)
  81/82                   20(c)                 10
  82/83                   15(d)                 10
  83/84                   15                    10
  84/85                   15(e)                 10(e)
  85/86                   12                    10
  86/87                   15                    12(SS), 10 (H)
  87/88                   20                    15
  88/89                   15

(a)Includes Reference and/or Psychology and/or Business in some years.

(b)Exceptions: 12% for Medical Sciences, Optometry, Nursing, Business; 17% for Near East, Japanese, Far East in FY 1980/81.

(c)Exceptions: 15% if little foreign materials are included in a science fund's subscriptions for FY 1981/82.

(d)Exceptions: A few social sciences funds were assessed 15% for FY 1982/83.

(e)Exceptions: 12% for Biology, Business, Chemistry, Geology, Reference in FY 1984/85.