California’s Free Lunch Mandate Bites the Budget

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Remember when California mandated free lunches for students? Well, California’s free lunch mandate bites the budget today.  But it’s not just lunch.  Every public school student under age 15 in the state is entitled to both breakfast and lunch.

pull quote California's Free Lunch Mandate Bites the Budget

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I have to add the usual caveat. There is no free lunch.  But there is the lunch for which someone else pays.  Technically I should call these zero-price lunches.  But that’s cumbersome and lacks impact.  So remember, in this article “free” means “zero-price.”

According to the San Jose Mercury-News,

It had been nine months since California began providing free meals for its public school students, no matter families’ income level. Even so, [Maria] Darnell [kitchen manager at Alameda’s Lincoln Middle School] was still shocked by how much the program had changed demand. That day, her staff had served 230% more meals than their average before the pandemic, on top of a 530% jump in the number of daily breakfasts.

It bears repeating: an axiom of economics is that when you spend more on an activity, the volume of that activity tends to increase.  Most rational parents would look at this offer and notice that it would save them time and money.  But there are two tradeoffs.  The first is nutrition.  If the household has a nutrition plan, accepting the offer of free food will be disruptive.  Many of these parents will opt out of the free lunch program.

The second tradeoff is more insidious.  Breakfast and dinner are two of the main events where parents and children could be in the same place at the same time. Eliminating the family breakfast also erases half those possible events.  Parental involvement is replaced by the state.  This is how the (literal) nanny state extends its reach.

What Changed?

Back to the Mercury-News article:

For years, federal and state funding has buoyed schools like Lincoln, helping them manage the growing costs of nearly everything in their kitchens, especially during the COVID-19 pandemic. But next month, a national policy to offset inflation for school cafeterias is set to expire — and in California, that’s happening right when demand has risen the most.

That policy is called the Keep Kids Fed Act, which boosted federal funding by $3 billion — 40 cents per lunch and 15 cents per breakfast — for children who qualified for free and reduced-price school meals to help districts offset the rising costs of food, supplies and delivery.

Oh.  You mean funding from the Federal and state governments to cover an emergency has now dried up? Welcome to yet another government bait-and-switch. Encourage school districts to expand their free lunch programs and fund a good part of the expansion.  Then, when the kids and parents are hooked, tell the school districts, “You’re on your own.”  The Federal and state governments act just like drug dealers who give out free samples of their product.

How Much Are School Districts Losing?

Again, the Mercury-News has the answer.  The chart below refers to “lost revenue.”  Remember, that “revenue” is actually taxpayer money from the Federal, state, and school district.  I’ll use the word “losses” instead, reserving “revenue” for situations in which products are sold.

Lunch funding losses by school district California's Free Lunch Mandate Bites the Budget

Lunch funding losses by school district. Click for larger image.

It’s not surprising that Oakland Unified leads the list with losses of $1.3 million.  That school district has been mismanaged ever since I briefly worked with them four decades ago. Least affected is Millbrae Elementary, losing $100,000.  I happen to know someone who works in the Millbrae school district.  They seem to be pretty well managed.  I have to add that this list does not include all the school districts in the Bay Area.


Congratulations to the various school boards around the state who are experiencing this.  Next time you accept funding from the Federal and/or state government, check to see if there’s an expiration date.  This stuff should not be hard.  It’s a testimonial to how badly most California school districts are managed.

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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.

2 Replies to “California’s Free Lunch Mandate Bites the Budget”

  1. Paul J Sullivan

    Financing such things need to be seen from the long run when they start. Otherwise, the long run could bite the budget. Good one, Tony