Oregon Drastically Expands Free School Lunch Program

Published August 16, 2019

Oregon is dramatically increasing the number of students from middle-income families fed at school at no cost to their parents.

The state is expanding its free breakfast and lunch program to include students from households with incomes up to three times the federal poverty level. Sixty percent of the 580,000 children enrolled in the state’s public schools will qualify.

Oregon was already more generous in this regard than many other states, providing free food to students from households with incomes up to 185 percent of poverty. The federal subsidy for free meals is for children in households with incomes up to 130 percent of the poverty level, with a smaller federal subsidy for reduced-price meals for children at 130 percent to 185 percent of poverty. Oregon will now provide free meals to all students who qualify for reduced prices under the federal standard, and children from 185 percent to 300 percent of poverty.

The estimated $40 million cost of the feeding program expansion is part of a $1 billion increase in state spending on education that will be financed by a new gross receipts tax or “business activity tax” of 0.57 percent.

Gov. Kate Brown signed H.B. 3427 into law on May 16. The free lunch eligibility expansion is scheduled to take effect in July of 2020.

‘Incentivizes Waste’

It is good for states to experiment with their social programs, as long as other states’ taxpayers don’t have to pick up the tab, says Daniel Sutter, an affiliated senior scholar at the Mercatus Center.

“I support federalism,” Sutter said. “If Oregon’s state government and taxpayers want to do this, they’re free to do so.”

States taking more responsibility for paying for school lunches is good public policy, says John Charles, president of the Cascade Policy Institute.

“I’m always in favor of states paying for services and capital projects from local funds rather than national,” Charles said. “Funding from the federal government is always perceived as ‘free money’ and therefore incentivizes waste.”

‘Flush with Money’—for Now

Many states find themselves with a surplus of dollars in a booming economy, Sutter says, but they should be cautious in making sweeping policy changes based on temporary prosperity.

“Politicians are being particularly generous right now when states are flush with money, but when the economy wanes again, they’ll be hard-pressed to be able to fund programs like this,” Sutter said.

“Things will be different in a few years when inevitably we have another recession and state revenue drops,” Sutter said. “This will be one more program that Oregon will have to fund, making its deficit that much worse.”

‘Rely More on Voluntary Assistance’

A different approach to free meal programs would be to allow the private sector to step in to bridge the gap, Sutter says.

“I think Americans understand that education is part of having opportunity in society,” Sutter said. “We don’t like the idea that students aren’t able to study or learn because their family can’t afford a nutritious breakfast or lunch.

“But Americans are also incredibly charitable,” Sutter said. “Perhaps we need to have the government do less in this area and rely more on voluntary assistance.”

Madeline Peltzer ([email protected]) writes from Hillsdale, Michigan.