Rising food prices squeeze Philadelphia school district

Rising food costs are eating an ever larger share of the School District of Philadelphia's budget.

Why it matters: The district is already facing a number of challenges driven in part by the pandemic, including a rise in teacher resignations.

• District officials say mounting prices for school meals could cut into other investments, such as staffing.

State of play: The district expects to face a shortfall of between $6 million and $8 million to feed students through the federally funded free- and reduced-price meal program this year, Uri Monson, the district's chief financial officer, told Axios.

• 100% of Philly students in the high-poverty district are eligible for the National School Lunch Program.
• The district expects to spend approximately $65 million on the program this year.

How it works: The district pays upfront for the costs of buying, staffing and distributing breakfast and lunch, as well as take-home weekend meals for some students.

• The federal government reimburses the district on a monthly basis.
• Yes, but: Federal reimbursements are capped per meal and the district pays for whatever is not covered.

The big picture: Inflation is surging to levels not seen since the early 1980s. Prices were up 8.5% in March over last year, and food costs in particular have soared, Axios' Matt Phillips reports.

• The U.S. Department of Agriculture already adjusted federal reimbursement rates for school meal programs across the U.S. earlier this year in response to inflation and supply chain issues.

What they're saying: Federal funding for the program has generally balanced out for the district over several years, but Monson doesn't expect that to continue.

• "Food prices have gone up and we're not getting the [federal] reimbursements to keep up with that... This trend is a troubling one and our guess is that it's going to get worse," he added.

What to watch: The district is currently budgeting for the 2022-23 school year and negotiating prices with vendors for the food program.

Go deeper: School districts brace for rising lunch prices