Child nutrition program at risk: Wake County projects revenue losses if federal eligibility changes reduce CEP participation

District nutrition staff told the Wake County Public Schools Budget & Finance Committee that a recent federal budget law will change eligibility calculations and could reduce the number of schools qualifying for the Community Eligibility Provision, imperiling program revenue and the district’s expectation of breaking even in its child nutrition enterprise fund.

“Currently, we have 44 CEP schools, which means that all of our students in those buildings eat meals at no cost,” said Miss Lawrence, a district child nutrition staff member. She warned that changes to SNAP and Medicaid qualification criteria included in the recently enacted federal budget bill will affect “direct certification,” the mechanism that identifies students who automatically qualify for free meals and underpins CEP eligibility.

Projected impacts on CEP and revenue

Lawrence presented scenario modeling showing how CEP participation could shrink if district direct‑certification counts fall. “If I lost 10% of my kids, 15% of my kids, 20% of my kids that were directly certified, how does that impact CEP? … If I lost 10% of my student population for DC, the schools that will remain would be about 11 schools instead of the 44, and then we will make $3,600,000 in revenue there,” Lawrence said. She added that a 15% drop would reduce participating schools to six (about $1.2 million revenue) and a 20% drop to four schools, noting that some students may still qualify through household applications but that staff cannot predict how many would be recaptured.

Program finances and reserves

Staff reminded the committee that the child nutrition program operates as an enterprise fund, which should generally break even. Mister Nieder explained the district’s operating‑months target: historically the program carried roughly two months of operating costs in reserve, but the reserve has trended lower in recent years. “We were traditionally operating back in 2014–15 with just over 2 months. … If we looked at it for 24–25, it would be back down in that single month category,” he said. Staff noted the program’s reserve has fallen to roughly one month of coverage in the most recent accounting, leaving little buffer if reimbursements and participation decrease.

Drivers of rising costs

Lawrence and other staff said the program faces two primary cost drivers: food and labor. Staff pointed to long‑running wage pressure for hourly child nutrition workers and recent increases that have raised the district starting rate to $17.75 per hour. They also cited elevated food prices since the pandemic and general inflation as continuing upward pressures. “Costs are going to continue to increase to provide a child nutrition program,” Mister Nieder said.

Options and tradeoffs

Staff outlined the options available if the program’s reserve falls toward zero: raise meal prices or participation, seek additional federal or state subsidies, capture more revenue through household applications, or shift local operating dollars to cover the child nutrition deficit. Mister Nieder confirmed that the board legally could use local funding to cover child nutrition obligations but cautioned that “every dollar that comes over here is a dollar that can't be spent over here,” noting the tradeoffs with classroom and other district priorities.

Committee questions and next steps

Committee members asked about outreach to families to increase household applications, local procurement and farm‑to‑school partnerships to control food costs, whether additional staff could help families navigate verification changes, and the potential for county or state action to offset federal reductions. Staff said they already conduct outreach and can expand efforts, and that some federal procurement and product‑specification rules limit local purchasing flexibility.

Ending

Staff presented the child nutrition briefing as informational and recommended continued monitoring; they said they will return to the board with updates if direct‑certification or reimbursement changes materialize and that the district will track potential options, including targeted outreach and budget tradeoffs.