States Scramble to Pay for Healthier School Food

The biggest overhaul to school lunches in the past 15 years is giving states heartburn. The federal government has mandated a healthier menu, and state and school officials are trying to figure out how to cope with the added costs.

At issue is the sweeping Healthy, Hunger-Free Kids Act that Congress passed last year at the urging of first lady Michelle Obama, who has launched a childhood anti-obesity campaign. The aim is to replace the junk food and unhealthy lunches common in many schools with more fruits, vegetables and whole grains, and less salt and fat.

“Although the federal government is giving states some upfront money to implement the new law, this equates to an unfunded mandate of hundreds of millions of dollars that goes into perpetuity,” says Jeannemarie Davis, who heads Virginia Governor Robert McDonnell’s office in Washington, D.C.

The new healthier lunches are to be in schools for the start of the 2012-13 school year. In the meantime, states and schools are grappling with more than a dozen rules and proposals from the U.S. Department of Agriculture that put the law into place. The proposed nutrition standards, for example, specify that schools offer every week “dark green and orange vegetables” and that at least half of the grains be whole-grain. The amount and types of recommended food also differ by students’ ages. Supporters say the new law will go a long way toward reducing childhood obesity; opponents say it’s yet another example of federal overreach.

Long-term costs

The federal government knows that putting healthier food on cafeteria tables will cost money. The U.S. Department of Agriculture plans on giving a reimbursement of six additional cents per lunch to those schools that offer more fruits and vegetables. The states have to make sure schools are living up to the healthier standards before the local districts can get the extra money. In all, states expect to get nearly $100 million over two years to ramp up these inspections, probably starting in 2012.

But state school officials — already strapped for funds — say that amount won’t come close to what is needed. The $100 million in federal aid covers only the beginning of the program. After that, the states will be on their own when it comes to abiding by the new rules. “Those funds are short term and will likely be inadequate to fully cover state costs,” the nation’s governors wrote in a letter to USDA earlier this year. According to the governors, USDA’s own analysis finds that the cost of state inspection programs alone will increase 67 percent. Instead of checking school districts every five years to ensure they are meeting the nutritional standards, the new law insists on inspection once every three years.

The federal government figures the higher costs of the new law will be partially offset by raising the price of the lunches that middle-income and wealthier families pay for out-of-pocket. But some critics are complaining that this move could price some families out of the program.

State legislators are full of questions. “What is a rural school district five hours away from Phoenix to do if fresh fruit is delivered only once a week?” asks Arizona state Senator Rich Crandall. “How is that going to work?” Crandall, who heads a private company that oversees USDA child nutrition programs, wonders how states are going to make sure thousands of school districts all meet the new nutrition standards. “Physically,” he says, “it’s impossible.”

The School Nutrition Association, a trade group that represents the school food service industry, also is troubled by the increased inspections. “State agencies are already struggling to keep up with the demands for reviews every five years,” the group says, “and would have great difficulty meeting the proposed three year review schedule.”

Enrolling more kids

States also are on the hook to make sure poor children who are eligible for free school meals are automatically signed up — meaning their families don’t have to fill out any applications. Children are eligible for free meals if their family income is at or below 130 percent of the federal poverty level, which currently is $28,665 a year for a family of four.

States can determine eligibility by seeing if a child’s family gets food stamps, and if it does, enrolling the child in the free lunch program through a process called “direct certification,” which can be done through computer matching of lists.

But it still won’t be easy. The new law requires that states reach 95 percent of these free-lunch eligible children. As of last year, most states didn’t even reach 80 percent, according to the latest federal data. USDA says states will have until 2013 to make the 95 percent benchmark, but should get to 80 percent this year and 90 percent in 2012.

States won’t get penalized if they don’t reach those targets, but they will have to come up with a plan and work with USDA to reach the 95 percent goal. USDA will give bonuses or extra money to states that do a good job enrolling more kids through the direct certification route. The federal government had started trying to encourage states to do this even before the new law was enacted, offering $22 million in grants last year to states with low “direct certification” rates.

There are other methods states can employ to try to get their participation rates up. This month, USDA announced a pilot program enlisting states to use Medicaid rolls to identify children who are eligible for free lunches. Some states are using foster care rolls. Under the new law, foster children are now automatically eligible for free meals regardless of their income. According to a new report from the Center on Budget and Policy Priorities, at least three states — Illinois, Indiana, and Washington — are developing systems that will compile a database of children in foster care to make it easier for foster children to get free meals.