California Mandates Free Lunches

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“There’s no such thing as a free lunch.” – Milton Friedman
“But there is the lunch for which someone else pays.” – Me
“Schools may not charge children more than 40 cents for a reduced price lunch.”

December 8, 2019
Copyright 2019 Tony Lima. All rights reserved.
(a pdf version of this article is available for downloading at the bottom of the page)

Ever heard of “lunch shaming?” The California legislature and governor are quite familiar with this idea. In fact, they know so much about it that they’re trying to make it illegal. But their law, SB 265, has consequences beyond simply boosting students’ self-esteem. This bill will encourage parents who currently pay a nominal fee for these meals to default. That will reduce revenue for these programs. And, under the California Constitution, the state is responsible for paying any costs local agencies incur in complying with statewide mandates. In other words, California taxpayers will end up footing the bill for deadbeat parents who choose to not pay what they owe. All this because California mandates free lunches.

Lunch shaming is not actions taken by other students. The mere act of serving a student a cheese sandwich instead of two slices of pizza has been deemed shaming. In 2017 the New York Times tracked down a few students who had experienced lunch shaming:[1]

On the first day of seventh grade last fall, Caitlin Dolan lined up for lunch at her school in Canonsburg, Pa. But when the cashier discovered she had an unpaid food bill from last year, the tray of pizza, cucumber slices, an apple and chocolate milk was thrown in the trash.

“I was so embarrassed,” said Caitlin, who said other students had stared. “It’s really weird being denied food in front of everyone. They all talk about you.”

Perhaps some anti-paranoia medication or counseling would be a better solution.

California SB 265 is aimed at eliminating “lunch shaming.” This law carries a perverse incentive: children of parents who fail to pay for the meals must be offered the same choices as all other kids.[2] That creates an incentive for parents to not pay.

SB 265 “ensure[s] that a pupil whose parent or guardian has unpaid school meal fees is not shamed, treated differently, or served a meal that differs from what a pupil whose parent or guardian does not have unpaid school meal fees would receive under that local educational agency’s policy.” Starting immediately all students must be offered the same choices and options.”[3]

These programs are part of the National School Lunch/Breakfast Programs. From the official website:[4]

The National School Lunch Program (NSLP) is a federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. It provides nutritionally balanced, low-cost or no-cost lunches to children each school day. The program was established under the Richard B. Russell National School Lunch Act, signed into law by President Harry Truman in 1946.

NSLP includes a variety of criteria for kids to get free meals. Those living in households receiving SNAP benefits (food stamps) and those enrolled in a federally-funded Head Start Program automatically qualify. If the household income is at or below 130 percent of the Federal poverty level, their offspring also qualify for zero-price meals. Households with income between 130 and 185 percent of the poverty line are required to pay for meals. (The dollar amount of the income limits varies with household size.) According to the fact sheet, “Schools may not charge children more than 40 cents for a reduced price lunch.” The Federal government reimburses the School Food Authority (SFA) about $4.00 for lunch and $2.30 for breakfast. (Reimbursement rates are higher in Alaska and Hawaii.)

PullquoteLet’s focus exclusively on those required to pay for lunches. The SFA accounting system usually involves accrual and billing. Students get a checkmark when they get lunch and the parents are billed. Sometimes parents don’t pay, carrying a negative balance in their lunch account. In the industry this is called a “lunch debt” or “meal debt.” Their kids will usually continue to receive lunches, but the meals are sometimes noticeably different from the regular offerings. This practice is called “lunch shaming.” (Students who already receive lunches and/or breakfasts for free are not affected by this law.)

If you know your child will get lunch regardless of whether you pay for it, you have an incentive to change your behavior. Some parents will simply refuse to pay at all. Others will pay sporadically. Some will continue to pay regularly. (Remember, the price of these lunches is $0.40 a day, $2 a week, $9 per month.) The result will be lower lunch revenues and a burden on either the local school district or the state’s few remaining taxpayers.

Interestingly, the California Constitution requires the state to reimburse local agencies and school districts for increases in costs created by a new state mandate. In other words, California taxpayers will end up subsidizing meals for kids whose parents refuse to pay.

Naturally, little data has been presented on the extent of this problem. A 2014 study by the USDA[5] included data on local actions taken when meal debts were incurred. The research revealed that 38.9% of districts served an alternative mean, 2.5% did not serve any meal, 5.1% initially served the reimbursable meal then switch to the alternate meal, and 6.2% did something else. That leaves 47.3% of districts that continue to serve the reimbursable meal. In other words, “lunch shaming” applies to about half of school districts in one form or another. Figure 1 summarizes these results.

Figure 1 Lunch Debt Responses. "SFA" stands for School Food Authority.

Figure 1 Lunch Debt Responses. “SFA” stands for School Food Authority. (click for larger image)

California does not have enough water to meet current demand. In October, PG&E cut off power to several million customers to avoid possibly starting a wildfire. Green energy policies have made California utility rates among the highest in the country. Berkeley has banned natural gas in new residential construction. The state requires solar panel installation on all new residential construction, boosting costs by between 2 and 12 percent with lower-income areas with lower housing prices taking the hardest hit. But never fear! Our brave legislators are watching out for your child’s self-esteem!

  1. Siegel, Bettina Elias, “Shaming Children So Parents Will Pay the School Lunch Bill.” New York Times, April 30, 2017. Available at Accessed October 14, 2019.
  2. SB-265 I.b.1 “Pupil meals: Child Hunger Prevention and Fair Treatment Act of 2017.” Available at Accessed October 14, 2019.
  3. SB-265 op.cit. Legislative Counsel’s Digest.
  4. USDA (2019) “National School Lunch Program (NSLP) Fact Sheet. Available at . Accessed October 17, 2019.
  5. USDA (2014) “Special Nutrition Program Operations Study: State and School Food Authority Policies and Practices for School Meals Programs School Year 2011-12.” Office of Policy Support, Food and Nutrition Service, Nutrition Assistance Program Report March 2014. Available at Accessed October 15, 2019. Specifically Table IV-7.5 Percentage of SFAs that Take Various Actions When a Student, Not Approved for Free Meals, Does Not Have the Money to Pay by SFA Characteristics, SY 2011-12, p.120.



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About Tony Lima

Retired after teaching economics at California State Univ., East Bay (Hayward, CA). Ph.D., economics, Stanford. Also taught MBA finance at the California University of Management and Technology. Occasionally take on a consulting project if it's interesting. Other interests include wine and technology.