A study examined the impact of state funding on school library programs in Indiana. Subjects included 1,479 city, suburban, and rural schools which completed survey forms. Results indicated that rural schools had the highest number of books purchased, highest circulation, and highest reading scores. Findings suggest that an average purchase of two books per student per school year is needed to keep library collections current; and that the new books purchased through state funding improved library collections and circulation statistics. (Contains 9 tables of data, and a sample survey form.) (EF)