A challenge for US libraries: keeping up with the 'information age' on pinched budgets

Bursting balloons and the delighted shrieks of children break the library's silence, but fail to dislodge the smile from the face of chief librarian Ann Geisel.

Only the founder of the Peterborough Town Library, Abiel Abbot - whose stern visage looks out over the scene from a wall-mounted oil portrait - seems tempted to put a finger to lips to order quiet.

The oldest tax-supported free library in the country, the Peterborough Town Library celebrated its 150th birthday this month with a party and traditional spelling bee.

But the smiles and laughter evident here are not necessarily echoed at the other 9,766 public libraries in the United States.

America's free libraries are struggling to make do with shrinking budgets, even as the costly new technology of the ''information age'' is transforming the way they do business.

The budgetary strains are blamed on a combination of long-term trends: the population shift from cities to suburbs that has eroded the tax base of many large cities; the tax-cutting zeal evidenced by Proposition 13 in California and Proposition 21/2 in Massachusetts; and the recent economic slump, which put pressure on town councils to cut library budgets in order to preserve other services such as police and fire protection.

''We're lucky here. We have a town that fully supports what we're doing,'' says librarian Geisel. ''I'm afraid we may be the exception rather than the rule.''

Indeed, other libraries are struggling to keep their doors open:

* The Detroit Library system has closed 2 of its 26 branches, while the remaining branches open only two or three days a week.

* The Free Library of Philadelphia has been forced to pare its staff by roughly 23 percent in the last few years due to budget pressures.

* The St. Louis Public Library's periodical subscriptions have been cut back to less than 2,000 - down from 4,596 a decade ago - while book purchases total roughly 11,000 a year, down from over 19,000 10 years ago.

* At the Enoch Pratt Free Library, Baltimore's public library, the cost of vandalism last year totaled $90,000, according to library estimates.

For all the bad news, the effects of budget cuts have not been uniform. Library experts say the prosperity of libraries varies widely, depending on the economic health of their local areas and other factors. But there appears to be a split between urban and suburban libraries, with downtown libraries bearing the brunt of budget cuts, and suburban libraries settling into a ''holding action.''

Some specialists argue that simply keeping pace with inflation isn't good enough. They say libraries that are allotted the same funding year after year cannot keep up with the flood of research and information that has come with today's ''information explosion.'' As a result, much available material is not being preserved in the nation's libraries.

The number of books, periodicals, record albums, and other research items Americans borrow from libraries each year nows tops 1 billion, but the real growth is in high-tech ''retrieval'' services. The use of reference services that allow librarians or users to retrieve computerized information indexes at the touch of a button has grown 15 to 20 percent each year for the past few years. And all of that growth has occurred in the one-tenth of all libraries that employ automation.

''Technological progress is forcing us to buy materials we wouldn't have bought 10 years ago. Software especially is expensive, but we can't back off of buying it and expect to deliver the same quality of services,'' says Robert Rohlf, a library consultant and director of the Hennepin County Library in Minnetonka, Minn. ''(Technology) has also expanded people's expectations. They want and expect us to do more.''

Finding a way to pay for high-tech equipment has sparked a debate that goes to the heart of America's public library system: ''fee or free.''

Cleveland's public library is offsetting the high cost of operating its six data-base computer systems by charging a fee when businesses use its services or when their questions call for special research. The systems provide information about everything from stock prices to government publications. But not everyone likes the idea of user fees.

''A major principle is at stake'' says Donald Sager, president of the Public Library Association. ''Should libraries establish a barrier to the public? The fear is that once you start with small fees, soon everyone will have to pay a registration fee and, before you know it, you're limiting poor persons' access to information.''

Still, technology is a two-edged sword. ''The libraries that have done best in the last 10 years are in rural areas, because they have pooled their resources and used technology to their advantage,'' says Mr. Sager. He says banding together may be the primary means of survival for many libraries in coming years.