School lunch prices to rise

WASHINGTON – School cafeteria lunch prices will rise modestly this year in districts that pad their food-service budgets with federal money designed to feed low-income children, under new federal rules posted Monday.

The new interim rules, designed to make school lunch prices better reflect their costs, will take effect July 1.

They call for full-cost or “paid” lunches to increase by 5 or 10 cents per meal in the 2011-12 school year, depending on the school district. Prices for items sold at school snack bars, such as french fries and hamburgers, also will rise.

The price hikes are the first increases not driven by inflation that the federal government has required since the National School Lunch Program was launched in 1946.

The change is expected to raise $300 million over five years to help offset the cost of the higher-quality meals required under the Healthy, Hunger-Free Kids Act of 2010.

The increase will affect only families that earn more than 185 percent of the poverty line, or about $41,000 for a family of four. They aren’t eligible for free or reduced-cost meals. Because the price increases are modest and will affect only students from families with higher incomes, government officials say they should have minimal impact.

But a host of child and nutrition advocacy groups say that any higher prices during a time of economic uncertainty will lead fewer students to eat healthy lunches and more to rely on less-nutritious meals from home or the value menu at fast-food restaurants.

The children of parents who earn slightly more than the income cutoff for free and reduced-price lunches would be most vulnerable to leaving the lunch program altogether, said Ed Cooney, the executive director of the Congressional Hunger Center, a nonprofit nutrition advocacy group.

“Those are people sucking wind, getting by. They’ve got two or three kids in school. Now they’ve got to pay more for each meal? What will they do? They may drop out,” Cooney said.

The U.S. Department of Agriculture, which runs the National School Lunch Program, expects fewer than 5 percent of students to leave the lunch program over the price increases.

The federal reimbursement for a free school lunch – $2.72 – covers the average cost of producing the meal.

The government also pays 26 cents toward the cost of each lunch that’s sold at full to students who don’t qualify for free or reduced-price lunches. Even counting that subsidy, these “paid lunches” typically are sold for less than their cost, however.

That means “federal funds intended for free and reduced-price lunches are being used to help fill the gap between what a paid lunch costs and what the school receives for it,” according to a USDA fact sheet. Doing so “effectively increases federal subsidies for higher-income children.”

To remedy the situation, the federal government is requiring that “paid” lunches sell for $2.46 apiece. That’s the government’s $2.72 reimbursement for free lunches minus the 26 cents it pays toward full-cost meals.

School districts that charge $2.46 for “paid” meals wouldn’t have to increase prices. Those that charge less can either find additional outside funding or simply raise prices by 5 cents per meal.

To avoid drastic price increases, the maximum annual increase cannot exceed 10 cents per meal, or $20 per year. Similar price increases would continue each year until the district’s systemwide revenue from paid lunches covers its cost to provide the meals.