The government spends more on public libraries and individuals buy fewer books at bookstores. Is this crowding out?

This phenomenon is definitely the phenomenon called
"crowding out" in economics. Perhaps the phenomenon could have been describes as
something like crowding out, if sale of books had resulted in increasing the prices of
books sold to individuals. However there appears to be no reason to believe that this
actually happens.

I do not have the statistics on value of
sale of books to individuals and to libraries. But if the value of sale to the libraries
is more than the sale to individuals, it simply means that, on average, the value
delivered to ultimate consumer, the reader, by a book kept in library is more than the
same book purchased by an individual. The obvious reason for this is that one copy of a
book in a library is accessed and read by many more people than a copy purchased by an
individual. This difference more than offsets generally higher price of hardbound books
kept in libraries, and the cost and efforts the readers incur for referring to and
borrowing books from libraries.

Another related explanation
of higher volume of sale of books to libraries is that a very large number of
specialized books are published that are costly to be purchased by most individuals.
Frequently one person may only want to refer to a small part of the book. Further, the
total number of books one person may be required to refer  for a specific project or a
task like writing a paper or a dissertation may be too large. A typical person may find
it beyond his or her means to buy and keep all such books. In addition, the the
libraries make a large number of books readily available to the readers, including many
books that may be currently out of print.