Libraries will eventually save money in this situation. Even if libraries paid the open access fee for all faculty, they would only be covering the costs necessary for their institution. Currently, libraries have to pay for bundled journal packages. So, if faculty need access to a particular journals, the library often has to pay a fee that is not justified for access to the required journals, and the providers justify this by bundling other journals with popular or renowned journals.
If academia moves to open-access journals, then everyone would be paying for their own contributions, and faculty would have access to everything they need. I suppose some libraries responsible for faculty who are active publishers may have their fees increase, but I'm not sure if that would be the case. I think the subscription prices set by providers are higher than the publishing costs of open-access journals. At least for the ones I've seen. I've seen open-access submission prices between $1,500 and $2,500. The faculty that teaches me is a small faculty with about 50 part-time and full-time faculty. If they each published 5 articles a year, that is $625,000 a year. I'm not sure what a reasonable amount of publishing is, but now that I look at it that is a lot of money. I don't know what it costs to get access to the various journal subscriptions used by my faculty, but I would be surprised if it was that much money. We have about 600 students in the various programs run by the faculty, which is about $1,800,000 worth of tuition per semester from the students contribution alone. Again, I don't know what amount the government provides after that. I doubt using 1/3rd of student tuition for publishing is feasible, but I'm not sure about that. Hmmm. Certainly, the library's budget will not be that large. I suppose, this system would favour institutions that do not publish as much. I feel that this benefits students in the end, but I guess I'm not sure any more if it would be cheaper. I am in a Master of Library and Information Science program. I'll ask around at school, and see if I can find out how much a typical journal bundle costs.