LEGISLATIVE FISCAL ESTIMATE

ASSEMBLY, No. 5684

STATE OF NEW JERSEY

220th LEGISLATURE

 

DATED: JULY 6, 2023

 

 

SUMMARY

 

Synopsis:

Requires certain nonpublic schools to provide meals to all students under “Working Class Families Anti-Hunger Act”; authorizes limited expansion of income eligibility to qualify public and nonpublic school students for free lunch.

Type of Impact:

State expenditure increase from the General Fund.  Local expenditure and revenue increases.

Agencies Affected:

Department of Agriculture, Department of Education, school districts.

 

 

Office of Legislative Services Estimate

Fiscal Impact

FY 2024 

FY 2025

 

State Expenditure Increase

$706,000

$56.3 million

 

Local Revenue Increase

$0

$54.5 million

 

Local Expenditure Increase

$0

$54.5 million

 

 

 

 

·         The Office of Legislative Services (OLS) estimates that raising the income threshold for free school lunches provided by public schools and directing the Department of Agriculture to reimburse nonpublic schools for free school lunches will increase State expenditures from the General Fund by approximately $56.3 million during FY 2025.

·         In addition, the OLS estimates that directing the Department of Agriculture to reimburse nonpublic schools for free lunches and breakfasts served to students whose family income is between 185 percent and 199 percent of the federal poverty level will increase State expenditures from the General Fund by approximately $706,000 during FY 2024.

·         Because the State will reimburse school districts for these expenditures, the bill would result in local expenditure and revenue increases for nearly the same amounts, minus the portion that is attributable to nonpublic schools.

 

BILL DESCRIPTION

 

      This bill would require school districts and nonpublic schools participating in the National School Lunch Program to provide free lunch, during the 2024-2025 school year, to students who are federally eligible for free or reduced price school lunch, as well as to students who are federally ineligible for free or reduced price school meals, but who have an annual household income of not more than 249 percent of the federal poverty level.  The bill would additionally amend existing law at section 12 of P.L.2022, c.104 to clarify that both public and nonpublic schools offering school breakfasts to students in the State, pursuant to the federal School Breakfast Program, will be required to provide such breakfasts, free of charge, both to federally eligible students and to students who are federally ineligible for free or reduced price school meals, but who have an annual household income amounting to not less than 186 percent, and not more than 199 percent, of the federal poverty level.

      The bill would require the State to provide funding to each school district and nonpublic school that participates in the National School Lunch Program, as may be necessary to reimburse the costs associated with the provision of free lunches thereby, in school year 2024-2025, to students who are federally ineligible for such meals, but who satisfy the bill’s expanded, State-level income eligibility requirements for that year.  The bill would further require the Department of Agriculture, in consultation with the Department of Education, to establish a standardized means by which to review the State reimbursement amounts being allocated under the bill, and under the existing Working Class Families Anti-Hunger Act, in order to determine whether, and the extent to which, participating school districts and nonpublic schools are receiving adequate reimbursement, from the State, sufficient to account for each participating school’s actual costs of meal delivery, including, but not limited to, food, labor, and other related costs.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that raising the income threshold for free school lunches provided by public schools and directing the Department of Agriculture to reimburse nonpublic schools for free school lunches will increase State expenditures from the General Fund by approximately $56.3 million during FY 2025.  In addition, the OLS estimates that directing the Department of Agriculture to reimburse nonpublic schools for free lunches and breakfasts served to students whose family income is between 185 percent and 199 percent of the federal poverty level will increase State expenditures from the General Fund by approximately $706,000 during FY 2024.  Because the State will reimburse school districts for these expenditures, the bill would result in local expenditure and revenue increases for nearly the same amounts, minus the portion that is attributable to nonpublic schools.

      These estimates assume: (1) that there are 40,424 families in the State with an income between 185 percent and 199 percent of the federal poverty level; (2) that there are 128,866 families in the State with an income between 200 percent and 249 percent of the federal poverty level; (3) that each family in the State has 0.68 children enrolled in a public school and 0.01 children enrolled in a nonpublic school that participates in the National School Lunch Program; (4) that 79 percent of students in the 185-199 federal poverty level bracket will utilize free lunches and breakfasts; (5) that 71 percent of students in the 200-249 federal poverty level bracket will utilize free lunches; (6) that each participating student will utilize 180 school lunches or breakfasts per year, as applicable; and (7) that the State will reimburse schools at the rate of $4.87 per lunch and $2.77 per breakfast.  These figures are partially derived from United States Census Bureau data and partially derived from National School Lunch participation data found in Volume 3 of the "School Nutrition and Meal Cost Study," published in 2019 by the United States Department of Agriculture (USDA).

      The OLS notes that the USDA estimates that the actual costs to schools of providing school lunches is greater than the federal reimbursement rate.  Thus, the State reimbursement rate may need to be higher than the estimate provided above ($4.87 per lunch) in order to ensure that schools break even, resulting in a larger State expenditure increase.  This expenditure increase may be mitigated by the provisions of the bill that require school districts to take steps to minimize the costs of their school lunch programs.

      The bill will also result in expenditure increases by the State and by school districts, since it requires various additional administrative tasks, such as processing an increased amount of meals reimbursement requests and approvals.  However, the OLS estimates that these tasks can be subsumed within existing staff duties.  The OLS notes that the bill requires the Office of Food Security Advocate, in but not of the Department of Agriculture, to establish a Working Group on School Food Security, which will, among other things, conduct regular studies on school food security issues.  It is unclear whether the Office of Food Security Advocate can accomplish this task using moneys already appropriated to it, or whether it will require an additional appropriation in future fiscal years.

 

Section:

Environment, Agriculture, Energy, and Natural Resources

Analyst:

Eric Hansen

Senior Research Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).