The Pima County library system will develop a new financial reserve policy, creating new guardrails to protect the library’s rainy day funds. That comes as county supervisors shifted $10.6 million in future funding for the PEEPs early childhood education program into the library district’s budget.
Library leaders say they support preschool scholarships but the change means PEEPs will now be funded out of the same taxing district that pays for library operations.
Reserve policies are standard among governmental entities to protect in case of emergency, say library leaders, and they want to protect those funds as the system shifts to supporting early childhood education.
“Everybody here very much supports early childhood education,” said new library director Tess Mayer in the Nov. 6 library advisory board meeting. “I just think it’s really important and our goal is that one of these things is not funded to the expense of the other.”
The scholarships were created by the Pima County Board of Supervisors in the spring of 2021 to help low-income families access early childhood education through free school district preschool classes, support for improving existing programs, and extended-day Head Start programming.
The county provided most of the funding but local cities including Tucson, Marana and Oro Valley also contributed, primarily using COVID relief dollars.
As that money has dried up, the question of how to continue paying for the preschool program has become increasingly urgent. Deepening the funding concerns is Tucson’s slow withdrawal from the program. The city agreed to partially fund PEEPs for this year, but said the program could be cut further amid an expected 2026 budget crunch.
The proposed policy would include:
- Clarification that the library district reserves are to be used for unanticipated budgetary shortfalls affecting the library district.
- Reserves are not meant to be used for operational deficits
- Clarifying that a Board of Supervisors vote remains necessary to ensure budget decisions through the fiscal year to fund library operations, facility needs and the PEEPs program
Unlike the library program, which draws from the taxing district all year, the PEEPs program gets a single payment at the start of the year that is allocated to the county department that runs the program.
Still, demand far exceeds available funding. PEEPs served 5,314 children this year — only about 41% of eligible low-income preschoolers, according to a county report.
For the fifth year of the program, $11.7 million is budgeted for PEEPs, a report on the program said, primarily from the library district plus $320,000 from Tucson and $140,000 from Marana.
The total library budget for operations is about $57 million, said support services director Anthony Batchelder during the November advisory board meeting.
The debate over how to fund PEEPs has been ongoing over several months.
In a May 2025 memo, Pima County Administrator Jan Lesher said the library’s large cash balance should be spent first before increasing the tax rate to bring more money into the library district for PEEPs.
“The Library District has been carrying a large cash balance due to lower operating costs during the pandemic, a reduction in capital expenses, and preparation for the costs associated with PEEPs,” wrote Lesher.
As property values go up, so does the revenue going into the library fund, said Lesher. The net income — which is operating revenues minus operating expenses — is projected to grow by almost $8 million by Fiscal Year 2028 and 2029.
“With these details, I hope that concerns about funding PEEPs out of the Library District are alleviated and it is understood that PEEPs will not compromise funding for Library services and capital improvement projects,” Lesher wrote.
The memo also said operating expenses were expected to increase by about $10 million next fiscal year as the library works to hire additional staff for expanded hours, and meet the costs for building security and library materials.
The current cash balance is projected to be $30.7 million at the end of Fiscal Year 2025/2026 and would decrease to $16.3 million by the end of Fiscal Year 2028/2029 as the district continues funding PEEPs, likely necessitating a future tax rate increase, said Lesher.
“What we really focused on was making sure that it was very explicit in the policy that use of reserves would be for exclusive use by the library district,” said Mayer in the Oct. 2 library advisory board meeting.
The county will convene a regional roundtable to help identify future funding for the program, said Lesher in an Oct. 8 memo. The county will also establish a business leadership council to help find philanthropic support for the program.
The library will bring the updated reserves policy to the Pima County Board of Supervisors over the next several months.
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