Budget

Our library gets taxpayer funding from its own line on a school district tax bill. We know this "259" funding is a recurring tax that can only be changed with approval of the voters. That said, this year the total amount remitted by the school district was reduced due to "corrections" made after the tax bills went out.

The short answer is yes, it's true. A school district tax levy, even if it’s a separate line on a school district bill in support of a library, can be reduced if a taxpayer challenges their assessment after the tax bills go out, and yes, since 2022, a library may have to refund overpayments.

What law, regulation, or regulatory authority governs the budget transfer policy at a school district public library?  Is there any case law or authority on that?

Quite a few laws, regulations, and regulatory authorities will impact the budget transfer policy of a school district public library.  Here are the biggies:

There seems to be a trend for libraries that have Friends groups to hold fundraisers, donations, and membership drives at the library. In some instances, the library collects money for the Friends and pays it to them at a later date.

Ideally, a public library does NOT handle the money of another entity, even for "Friends."  Ever.

That said, there is no law barring a library from helping out a partner or organization with cash handling for events; this "never" rule comes from risk management, not the law.  

Are incorporated "Friends", who do not receive over $50 thousand, do not have paid staff, and are only able to provide the funds to the library, required to register [with the New York Attorney General] and submit the CHAR500 form?

When one considers becoming a "Friend" of a library, several activities spring to mind:

We are a small municipal library serving a village of 6500 & a town population the same size. Our village trustees have decided to take our balance from the 2022-2023 fiscal year & add to the village general fund. Does New York State Education Law #259 apply here?

For me, the most persuasive commentary on this topic is from the NYS Comptroller, who wrote in 2002:

Is it legal for a library board to approve expenditures (without a referendum) for a capital project from its operating funds (or operating fund balance) to bridge a shortfall in bond monies earmarked for the construction of a new building?

Before I address this question, let's parse the meaning of "legal."

There's "legal" as in: Is this specifically against the law?

There's "legal" as in: Is this not only not specifically against the law, but generally allowed?

And there's "legal" as in: Is this a cool thing to do?

Several of the library's board members feel that it is illegal for the library to sell anything other than books and keep the money. They believe that the library cannot "ask for money". That function (selling items, asking for money, etc) is a function of the Friends group.

Before we get to the main question (can libraries sell things to raise money?), we must refine something the member mentions in passing.