Hawaii missed out on $200M in federal funding for school meal programs, report says

In the past two decades, Hawaii has missed out on more than $200 million in federal funding for child nutrition programs because of an outdated analysis of food costs, a recent study reports.

The Hawaii Appleseed study, released in May, found that federal programs meant to reimburse organizations that feed Hawaii’s children have not taken into account more than 40 years of increases in local food costs.

The programs — including the National School Lunch Program, School Breakfast Program, Child and Adult Care Food Program and Summer Food Service Program — cover an average of 85% to 90% of meal production costs for participating organizations around the country, while public funds usually cover the rest.

In Hawaii the state Department of Education’s School Food Services Branch operates the NSLP and SBP, while smaller sponsors operate the other programs, and on average the federal reimbursements cover only about 55% of those operators’ food costs, according to the study.

Some small operators of these programs, such as the YMCA, are having difficulties remaining active.

“With the reimbursement rates far below what is needed, we are constantly challenged with having to raise funds to cover administrative and staffing costs, and purchase needed supplies (e.g. cleaning), expenses that are over and above the cost of meals,” said Diane Tabangay, executive director of youth development at the YMCA of Honolulu.

The state Legislature has funded the SFSB $27 million to $30 million in general funding a year since 2017 to cover those costs. Since 2000 the SFSB alone has missed out on more than $220 million in federal funding for those food programs, says the Hawaii Appleseed report, released in May.

“At the end of the day, this hurt a lot of kids as they were growing up, because they don’t have the same quality of food other states have had,” said Jesse Cooke, vice president of Ulupono Initiative, one of the authors of the report.

Hawaii is one of the country’s “outlying areas,” including Alaska, Guam, Puerto Rico and the U.S. Virgin Islands, where participating organizations receive meal reimbursements at rates above what is known as the National Average Payment.

Based on the 1979 analysis by the U.S. Department of Agriculture, which factored labor and food costs, Hawaii’s meal reimbursement rate was set at 17% above the NAP. The Hawaii Appleseed report, which did the analysis again but accounted for the increased meal production costs in the state, found that the rate should be 62% above the national average — the same as Alaska’s.

“To account for significantly increased meal production costs in Hawai‘i versus the mainland, the reimbursement adjustment for Hawai‘i needs to be increased from 17 percent to 62 percent above the NAP,” the report said. “The cumulative impact of the increase will be significant, bringing tens of millions of dollars in additional federal meal and snack reimbursements for Hawai‘i on an annual basis.”

The report, citing 2020 data from the USDA’s Thrifty Food Plan, said that the cost of feeding a family of four in Hawaii for a month is 90% higher than the U.S. average. In 1979 that gap was just 35%.

The federal funding is needed in Hawaii, the report argues, where hunger among children is a worsening problem because of the COVID-19 pandemic, according to a recent Feeding America report.

The USDA is doing a follow-up analysis to the 1979 School Nutrition Meal Cost Study that will update the reimbursement rates for Hawaii and the other outlying areas, but results from the study are not expected until 2026 or 2027.

Hawaii Appleseed, Ulupono Initiative and the other authors of the report, including the Hawaii Afterschool Alliance and Hawaii Children’s Action Network, are advocating for short-term solutions until the study is complete.

One includes congressional support for expediting the study timeline or a temporary increase in the rate.

In May all four elected officials in Hawaii’s congressional delegation sent a letter to the USDA requesting a temporary increase in the reimbursement rate.

“While we support the study’s objective to provide a comprehensive, accurate accounting of the real costs associated with producing and supplying school meals, we are concerned that the current school meal reimbursement rate for Hawai‘i is not reflective of these costs, and that the state and its students are currently being negatively impacted,” said the letter signed by U.S. Sens. Brian Schatz and Mazie Hirono and U.S. Reps. Ed Case and Kai Kahele.