Thirteen Republican-led states rejected federal funding to feed children. Where does the unused money go?

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Listener Douglas Tickner asks:

I read this in a story from last February Some states, all led by Republicans, rejected federal funds that would have helped their own low-income families feed their children. What happens to federal money if the states to which it was allocated reject it?

Millions of low-income families received $120 per child for groceries this summer through the U.S. Department of Agriculture’s new SUN Bucks program.

The federal government allocated $2.5 billion this fiscal year for the program, also known as summer EBT. Even though summer is over, states like Pennsylvania are still distributing benefits through the end of October.

Thirty-seven received this federal funding, but 13 Republican-led states rejected the money, including Florida, Georgia, Idaho, Iowa, Oklahoma and Texas.

States declined to participate because of a lack of administrative resources and funding, existing programs they felt already served their residents, concerns about the terms of federal funding, time constraints, and ideological differences.

“We are sending the wrong message to parents and children that we will continue to provide for everyone without requiring anything in return,” said Idaho State Senator Cindy Carlson.

Funding from SUN dollars is part of a larger pool of money used for USDA’s array of child nutrition programs. SUN funds will roll over into the program’s second year and eventually return to the Treasury Department if not used for other child nutrition programs, a USDA spokesman said.

“It’s just incredibly disappointing to see that there’s still money on the table,” Luke Elzinga of the Iowa Hunger Coalition told Marketplace earlier this year.

States were required to fund half of the program’s administrative costs, such as staffing, data management and postage. The federal government offered to cover the other half along with the benefits itself.

According to the governor’s office, Maryland alone provided more than $70 million in food subsidies, helping to feed 586,000 children. The state spent $5.8 million on the program, Maryland Matters reported.

“Summer can be the hungriest time for children,” said Kelsey Boone, senior child nutrition policy analyst at the Food Research & Action Center. “As the school year ends, millions of children nationwide will lose access to school meals, and this childhood hunger can have long-term physical, academic and emotional consequences.”

The Pandemic EBT food program helped children during the COVID-19 crisis, but services ended last year. And other USDA summer nutrition programs don’t reach everyone. SUN Meals, for example, is only available in certain locations, such as schools.

According to FRAC, before the pandemic, summer feeding programs served only one in seven children who relied on free or reduced-cost meals throughout the school year.

So when a state opts out of a program like SUN Bucks, kids don’t have that safety net, Boone said.

Iowa would have needed an estimated $2.2 million to administer the program. But the USDA estimated that this could have given families nearly $29 million in benefits.

Some states that faced similar costs still opted for the program. Kansas had to pay $1.9 million for its program, which is expected to provide families with $32 million in benefits. Iowa and Kansas each have poverty rates above 11%.

Boone noted that states have options to reduce the cost of the program. For example, they can apply for a summer EBT technology grant of over $1 million from the USDA to build the infrastructure needed to distribute SUN Bucks, she said.

“We really hope that states can recognize this and resolve some of these issues,” Boone said.

Tribal nations within states that declined the funds were still able to participate. In Oklahoma, the Cherokee, Chickasaw, and Muscogee Nations partnered to provide benefits within their borders.

“We didn’t have much time to prepare. We just had to get going and get started,” Melissa Stayathome, director of the Cherokee Nation Summer EBT program, told Marketplace earlier this year.

Next year, some families who did not receive funding will have the chance. Alabama, which opted out this summer, will participate in 2025.