POINTS OF VIEW DIRECTLY OPPOSITE

Now, obviously, those two points of view are in direct opposition. I hope today that we can come to understand what lies behind the Department of Agriculture's sudden and drastic policy change which has created this chasm of disagreement. I personally think we may well find that it is budget considerations-that is, the Office of Management and Budget is behind this change.

OFFICE OF MANAGEMENT AND BUDGET DECLINES TO ATTEND

I regret that we do not have the opportunity to explore the role of the Office of Management and Budget openly, but, unfortunately, Mr. Shultz has declined the committee's invitation to attend today's hearings.

Our first witness is Mr. Lawrence Bartlett, who is the director of the School Lunch program of the State of Tennessee, and chairman of the State Directors' Section of the American School Food Service Association. He is accompanied by Byron Hansford, executive secretary of the Council of Chief State School Officers.

Mr. Bartlett?

STATEMENT OF LAWRENCE BARTLETT, CHAIRMAN, STATE DIRECTORS' SECTION, THE AMERICAN SCHOOL FOOD SERVICE ASSOCIATION, NASHVILLE, TENN.

Mr. BARTLETT. Mr. Chairman, members of the Select Committee on Nutrition and Human Needs, my name is Lawrence Bartlett. I am director of the area of school food services with the Tennessee State Department of Education. We administer and supervise the school food service programs in some 1,645 public schools of the State that participate in the National School Lunch Program. A part of the testimony presented today will be representative of the programs in my State. Additionally, I hold the position of chairman of the State Directors' Section of the American School Food Service Association representing the 50 State directors and also representing our association which has a membership of more than 50,000 persons who are engaged in nonprofit school food service programs.

This testimony is presented as a factual documentation that the rule change as proposed by the USDA for the operation of the National School Lunch Programs will so obstruct program operations that the mandates of Congress to provide food services to needy children cannot be met.

My position as chairman of the State Directors' Section of the American School Food Service Association, as State director for School Food Service Programs for the State of Tennessee, and as executive board member adviser to the Legislative Committee of the American School Food Service Association, has placed me in the unique position of being involved in a very careful and detailed study and analysis of the proposed regulations as presented by the USDA Food and Nutrition Service. As a member of a special committee convened by the American School Food Service Association, we made an indepth study of the

proposals. It has also been my privilege to participate in a discussion of the proposed regulations with USDA officials and other State directors in Minneapolis, Minn., prior to the actual issuance of the proposal as well as to be involved in a regional conference of USDA and State directors in the southeast region devoted to a review of the current and proposed regulations.

I say all of this to emphasize the fact that a very detailed study of the proposals have been made.

INCLUDES STATE DIRECTORS' POSITION PAPER

In addition to this prepared statement, Mr. Chairman, I want to include a "position paper" which was developed and unanimously adopted by 37 State directors of school food services at our postconvention workshop in Minneapolis, Minn., on August 7, 1971.

Senator McGOVERN. Without objection, the statement will be included as a part of the record.*

Mr. BARTLETT. This position paper was developed after we were given a briefing by a number of USDA officials as to what the new proposed regulations would contain. I must give credit to the USDA officials there for "laying on the line" what the regulations would contain, and I must also give credit to the hearing astuteness of the State directors. After seeing the proposed regulations in print and after making our analysis, we find that no changes need to be made in our position paper regarding the proposed regulations.

Under Section 210.11 (b-1) of the proposed regulations it will be impossible for any State to exceed its initial apportionment of Section 4 funds. The proposed regulations say, in part, that "In each fiscal year, the State agency, shall initially assign rates of reimbursement at levels which will permit reimbursement from the general cash-for-food assistance funds available to the State agency-for the total number of type A lunches it is estimated will be served in participating school in the State in such fiscal year." This part of the regulation would then in effect render null and void Section 210.4 new paragraph (f) which provides for "the distribution to State agencies other than Puerto Rico, the Virgin Islands, Guam, and American Samoa, in the following amounts: (1) 5 cents for each type A lunch served during the 1972 fiscal year which is in excess of a base number of type A lunches served in 1972. This means that an estimated number of 14 States whose per capita income is above the average for the Nation in effect could not-and I emphasize "could not"-receive the guarantee of 5 cents per meal.

NEW PARAGRAPH CIRCUMVENTS INTENT OF CONGRESS

It is also my feeling that Section 210.4 proposed new paragraph (f) to the regulations circumvents the intent of Congress as specified in the National School Lunch Act which provides a formula for the distribution of general cash-for-food assistance funds and, further, it will be inconsistent with Section 210.4 of the present regulations.

*See Appendix 2, p. 1855.

A careful reading of the proposed Section 210.11 (b-1) of the proposed regulations tells me and all other State directors that reimbursement rates must be assigned within the funds apportioned so that these funds will extend through the entire year. Even after making mandatory revisions following the month of operation of January, the rates must be adjusted so as to stay within the total apportionment.

Mr. Chairman, up to this point we have been concerning ourselves with the Section 4 cash-for-food assistance funds, and how these funds must be utilized for program purposes. The remaining part of my testimony will deal primarily with the use of the appropriated Section 11 and Section 32 funds and how the proposed regulations place such restrictions on these funds to the point that many school systems will find it impossible to carry out the intent of the Congress by putting an end to hunger among America's school children as provided by Public Law 91-248. Section 9 of this act states that "any child who is a member of a household that has an annual income not above the applicable family size income level shall be served meals free or at reduced cost," and, furthermore, Section 11(a) provides authority for "appropriation as may be necessary"-and I emphasize this "appropriation as may be necessary" to assure access to the lunch program under this act of children of low-income families, and Section 11(e) provides that the amounts of funds paid to a school shall be based on the need of the school for assistance in meeting the requirements concerning the service of lunches to children.

OBJECT TO USE OF BASE

Section 210.4 new paragraph (f) of the proposed regulations establishes a method of apportionment of Section 32 funds as special cash assistance funds to the States. We object to the use of a base as a requirement to be met before Section 32 funds may be requested. We also object to the arbitrary establishment of an average of 30 cents per lunch to be made available as special cash assistance. The 30 cents average rate from special cash assistance is not realistic. Reported cost of producing type A lunches in my State is 43.5 cents. An average rate from Section 4 of 6 cents and an average rate from Section 11 of 27 cents plus 0.06 cent from State funds still leaves the school with a deficit of 10 cents for each and every free lunch it serves to children. We have applied the language of the proposed regulations as contained above to the program operations in Tennessee, and we see an average of only 27 cents' reimbursement from Section 11 rather than 30 cents' average as indicated by USDA as being available.

NO SECTION 32 FUNDS APPORTIONED

It is evident to me that the U.S. Department of Agriculture has no intention of releasing the Section 32 funds, as no funds are currently apportioned.

The Congress, in its wisdom, in passing Public Law 91-248, determined that the States should contribute as a minimum during the first biennium, an amount equal to 4 percent of the required matching amount of Section 4 funds. If the present proposed rules should be published, the Secretary is arbitrarily requiring the States to pick up

an additional amount of funding in order that eligible needy children will have access to a lunch program. By taking average cost of 43.5 cents to produce a free lunch, my State's contribution to that lunch under the new proposal will be an additional 10.2 cents. Instead of the State's share being 0.013 percent it will become 0.23 percent. Or, putting this in a different perspective, if additional State funds are not used-and this will be very unlikely for the next 2 years the child who pays full price for his lunch must pay an average of 38 cents for his lunch plus whatever is necessary for the number of free lunches served. If a school serves 50 percent of its lunches free, the paying child would need to be charged 48 cents. For 25 percent of the lunches served free, the paying child and the school could get by on

42 cents.

If we should go to a situation of 75 percent free, then the paying child would have to contribute 69 cents for his lunch in order to pay for the cost of producing his lunch and three others. It is our position that the Congress intended to expand the lunch program to all needy children by guaranteeing to provide adequate funds with prudent administration to pick up the cost of producing the meal for the needy child. The present proposal absolutely prevents the States from making this type of commitment to school boards. In one county in my State which is, perhaps, an average or slightly above average in income and taxpaying ability, it is estimated that if the present rules apply for the 1971-72 school year that the county stands to lose approximately $22,000. This loss would be made up of Section 4 funds as well as Section 11-32 funds. Last year, in order to pay up to the cost of producing the lunch for the needy child, the State was required, under the 12-cent rule governing the expenditure of Section 11-32 funds above 30 cents to pay many schools at the rate of 12 cents from Section 4 funds in order to pay more than 30 cents from Section 1132 funds for the free or reduced-price lunch.

SURVEY TO DETERMINE TYPE A LUNCH COST

The ASFSA is conducting a survey of all State directors to determine the cost involved in producing a type A lunch during the 197071 school year: the number of free or reduced-price lunches served during the past school year; the anticipated number to be served during the 1971-72 school year; the loss per meal that would have occurred if the schools had received only 35 cents in Federal reimbursement during the 1970-71 school year and the loss in funds that the schools would receive if reimbursement for free and reduced-price lunches during the 1971-72 school year was 35 cents. We have received a few returns from this questionnaire and find, for example, that the cost of producing a meal in New Mexico is 43 cents. The anticipated loss at the schools in this State, if present regulations prevail, would be $1,200,000. Taking the case of Oklahoma, their within-school cost is estimated at 41.79 per meal and the anticipated loss for the 1917-72 school year will be in excess of $1 million.

I would like to cite to the committee here a few of the figures that have been provided for us concerning the anticipated loss if the proposed rule changes should become effective.

The Isaac District No. 5 school in Phoenix, Ariz., would sustain a loss of $8,755. The city of Phoenix, $17,700. The State of Arkansas, $987,600. The State of California, $9 million, of which Oakland would sustain a loss of $724,000; Sacramento, $116,927. The State of Colorado would lose $550,000. Broward County, Fla., would lose $222,300; Dade County, $67,700, Columbus, Ga., $75,286. The State of Hawaii, $457,600. Indianapolis, Ind., $307,647. The State of Kansas, $659,586. Hazard, Ky., $12,179. The State of Maine, $1,326,000. The State of Massachusetts, $3,240,000. Detroit, $1.4 million. Minneapolis, Minn., $750,000. The State of Missouri, $4 million-the city of St. Louis, $750,000 of this $4 million. Great Falls, Mont., $60,000. Nebraska, $496,000. Las Vegas, $64,485. This loss at Las Vegas may not be much compared to the millions lost at the gambling tables, but it does mean an awful lot of lunches for needy children.

The State of New Hampshire, $215,500. Ohio State, $5,565,000. Oklahoma City, $317,000, South Dakota, $328,750. The city of Memphis, Tenn., would sustain a loss of $975,000. Utah, $468,495. And West Virginia, $2,661,300.

Mr. Chairman, we request the privilege of filing with your committee at a later date the results of our survey,* to be furnished by the various State directors of school food service programs, which will show the anticipated loss of Section 11-32 funds for free and reducedprice lunches if the proposed regulations should prevail.

WHAT IS TOTAL LOSS TO COUNTRY?

Senator MCGOVERN. I was just going to ask you: Do you have any estimate as to what the total loss is to the country as a whole, as a consequence of these regulations? Can you give us any estimate on that?

Mr. BARTLETT. Mr. Chairman, we have not compiled all of the figures, and, I am sorry, I could not give you that estimate at this

moment.

Senator MCGOVERN. But you say you will supply an estimate?

Mr. BARTLETT. Yes; after our data has been tabulated. And I think most of the results are in, but our committee has not as yet been able to tabulate all of the data. But we would like to file this with you as soon as it is completed.

Senator MCGOVERN. I think that would be helpful to us. The committee staff has made some rough estimates as to what this means in terms of overall budgetary loss to the various States-that is, the combined loss—but if you could also give us your estimate of that, at the earliest possible date, I think it would be helpful.

It is important to stress that these are still proposed regulations. As Secretary Lyng has written to me on September 1, that at least until after this hearing is over and there has been an evaluation as to what has been done here today, these regulations will not become final. So I think the sooner we can get estimates from the school lunch directors as to what the total loss is for the Nation as a whole, the sharper we can draw the picture which needs to be drawn.

Mr. BARTLETT. Mr. Chairman, rather than trying to give you a ballpark figure, I would rather rely on the data.

*See Appendix 2, p. 1856.