Public libraries are funded by a mix of local taxes, state grants, and federal programs.

The federal government distributes more than $160M in grants directly to libraries each year

The Institute of Museum and Library Services distributes funds annually to State Library Administrative Agencies, which support statewide initiatives and channel funds to public and academic libraries.

Virtually all public libraries in the US offer free internet access

Beyond providing internet access, libraries have also expanded into broad digital hubs for communities. Ninety percent offer basic digital literacy training, 76% help patrons navigate online government services, and 73% assist people with job applications.

State and local governments fund very different services

Local governments allocate 39% of their spending to K-12 education, while states allocate less than 1% directly—although much of local education funding actually comes from state and federal grants to local communities. States instead allocate their budgets to public welfare and health programs (45%) and higher education (15%).

See how local, state, and federal governments divide the cost of public services

Federal, state, and local governments share responsibility for funding public services. Education, roads, and social programs are funded through a complicated mix of taxes and intergovernmental transfers.

One in seven US tax dollars is collected by local governments

Local governments collect about $886B each year to support education, infrastructure, and public health. Roughly three-quarters of this funding comes from property taxes, with the rest sourced from sales, excise, and income taxes.

The federal government sent roughly $1.1T to state and local governments in 2024

Federal grants support a large portion of state and local budgets, funding Medicaid, infrastructure, education, and housing. In FY 2024, these transfers made up about 16% of total federal spending.

Police spending is one of the largest budget items for local governments

Local governments finance most of the costs for police in the US. Total state and local criminal justice spending—covering police, courts, and corrections—reaches hundreds of billions of dollars annually.

Private K-12 schools rely on tuition; colleges rely on funding for research

Tuition, endowments, donors, and grants often fund private schools, allowing them to eschew national curriculum standards. Private colleges and universities also charge tuition, but often rely on federal funding for research.

The federal agency dedicated to supporting museums and libraries spent $280M in 2024

The Institute of Museum and Library Services—a division of the National Endowment for the Arts and Humanities—administered $294M in FY 2024, accounting for nearly 40% of the National Endowment's total spending.

Explore the unexpected ways people use public libraries in this 'This American Life' episode

Libraries serve as far more than book repositories. This episode follows a family experiencing homelessness that spent months living in their local library, Iranian students reuniting with family across the US-Canada border because the library straddled both countries, and a Vermont man who built his own library to house unpublished manuscripts.

Many local governments also struggle to rein in their spending

The federal government isn’t the only one that holds debt. State and local governments borrow money to cover budget gaps, too.

Gambling and lotteries funded America's early expansion, funding infrastructure and capital projects.

In the colonial era, lotteries were viewed as a voluntary tax to help fund infrastructure and capital projects. The idea came from Europe, which had used lotteries dating back to the 16th century. The image below is from a Massachusetts lottery in 1758.

Circulating libraries helped the novel's popularity surge

As literacy rates began to rise in the 19th century, so did the demand for reading materials. The only problem? Newspapers and books weren’t cheap, and newly literate middle-class families struggled to afford literature. That changed when booksellers began offering small fees for patrons who decided to borrow rather than purchase books. This was eventually called a circulating library, an innovation that would satisfy the burgeoning readership of novels and increase literacy rates further.

Transit is funded through a three-tier system, and the federal government is the smallest piece

In 2019, the federal government covered about one-sixth of the $79B spent on public transit. States and localities make up the rest. About 85% of all transit trips are taken by bus or heavy rail, and nearly 4 in 10 US transit trips occur in the New York City metro area.

Andrew Carnegie donated $56M to build 2,509 public libraries worldwide

Carnegie, who left school at 12 and credited borrowed books for his self-education, began funding libraries in 1881. Of the 2,509 libraries built, 1,681 were in the United States. He required each community to maintain the library as a condition of his gift.

Federal government supports—but doesn't run—K-12 schools

The Department of Education contributes about 8% of K-12 funding and administers targeted grants, civil‑rights enforcement, research, and data collection. Crucially, it is legally prohibited from directing curriculum, personnel decisions, or instructional content, leaving that control to states and districts.

Individual income taxes are the federal government's primary revenue source, see a tracker that breaks down where the rest of the budget comes from

The US government historically makes nearly half of its total revenue last year from individual income taxes. But the US makes also makes money from a variety of other sources, including Medicare taxes and corporate income taxes. However, the federal government has run a deficit since 2001—reaching a peak of $3.13T in 2020.

Where colleges get their money, visualized

If you're curious about how different colleges and universities generate their revenue, this National Center for Education Statistics webpage offers a clear visual breakdown. See how public, private nonprofit, and for-profit institutions fund their operations, highlighting the differences between funding sources depending on the type of institution.

Benjamin Franklin donated the books that became the first true public library in the US.

See inside the Boston Public Library, the first city-run free public library in the US

Founded in 1848, the McKim building opened in 1895 during a period of cultural optimism and social reform. Its Beaux-Arts architecture features marble staircases, murals by John Singer Sargent, and a Renaissance-inspired courtyard.

Charting where federal revenue comes from

About 50 percent of federal revenue comes from individual income taxes, 7 percent from corporate income taxes, and another 36 percent from payroll taxes that fund social insurance programs. See breakdown in charts here.

Local governments borrow money for long-term projects by issuing municipal bonds

When a city needs to build a school, a road, or a water treatment plant, it usually issues a municipal bond—borrowing money from investors to be paid back over time. The market for these bonds now exceeds $4T.

Before the 16th Amendment, US tax law required direct taxes to be directly apportioned to a state's population

Due to these requirements, the federal government could not impose many direct taxes. Direct taxes include property and income taxes, whereas indirect taxes include duties and excises.

Benjamin Franklin founded America's first lending library, the Library Company of Philadelphia, in 1731.

In 2020, government entities spent $316.5B on infrastructure, with state and local governments accounting for 34.8% of that amount.

Most pensions are subject to federal income taxes

Those taxes kick in once someone starts taking distributions from their pension. Whether a pension is subject to state income taxes depends on the state and other factors. Learn more about how pensions are taxed in this article.

Dolly Parton's Imagination Library program provides free books to kids

Parton launched the program in 1995 to benefit children in Tennessee by providing a free book every month. It began expanding across the country in 2000 and was eventually adopted in Canada, the United Kingdom, and Australia. The organization claims to provide over 1 million books to children every month.

Independent bookstores are expanding across the country, though studies show literacy rates are rapidly declining, with only 35% of American high school seniors considered proficient readers.

A sociologist makes the case for libraries and parks as essential public infrastructure

Eric Klinenberg argues that social infrastructure that brings people together is as vital to a community as roads or power grids. He contends that when communities invest in these spaces, residents grow more connected, and when they are neglected, isolation follows.

Federal spending falls into 2 categories: mandatory and discretionary

Federal spending is split between mandatory programs, funded automatically by law, and discretionary programs, funded through annual appropriations. This video breaks down which major programs fall into each category and why the distinction matters.

The federal government uses the FAFSA to determine student's eligibility aid

Apply for billions of dollars in scholarships, grants, loans, and Federal Work-Study funds using the Free Application for Federal Student Aid form. Get an overview of how the FAFSA form can help you finance your education with money from the federal government, your state, and school; understand when to apply; and find out what you'll need to fill it out.

The Federal Transit Administration distributes roughly $20B annually to support local transportation

Created by the Urban Mass Transportation Act in 1964, the FTA funds and oversees the roughly 2,200 transit systems that receive federal support across the US, covering everything from subway capital investment to rural bus service.

American local government comes in five distinct forms

Counties, municipalities, townships, special districts, and school districts are each created for a different purpose, operating under different rules, and answerable to the state in different ways. Special districts, the least known of the group, are created for specific purposes, such as transit or fire protection.

As of 2025, the Wikimedia Foundation funds 14 open-source, free knowledge projects

Since its founding in 2003, the nonprofit has provided financial, legal, and infrastructure support to Wikipedia and its sister projects (e.g., Wikinews), primarily by managing donations, which average $11, from readers. Additional funding comes from gifts exceeding $1,000, the Wikimedia Endowment, and providing Wikipedia content for commercial use.

Fire districts and fire departments are governed differently

A fire department is usually a municipal agency under the control of city or county authorities. In contrast, a fire district functions as an independent special district with its own elected board, separate budget, and taxing authority.

The powers of local government are rooted in state law, not the Constitution

Unlike the federal government or the states, local governments have no constitutional standing—they exist only because state law allows them to. A state legislature can redraw a city's boundaries, strip its powers, or dissolve it entirely.