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Happy Meals

Thursday, June 1, 1995

Every morning for seven years, Linda Desrosiers packed her lunch before heading to work as a high-school cook. "I wouldn't touch the food they had us make," she says. "People looked at it and smelled it, but no one ate it."

School janitors in Woonsocket, Rhode Island, an impoverished textile-mill town, confirm Desrosiers's stories of platefuls of grayish green beans and "beef surprise" winding up in the dumpster. One janitor said he changed the high school's industrial-sized garbage bags at least twice in each of the three lunch periods.

In recent months, liberals led by President Clinton have argued that the federal school lunch program "ain't broke" and shouldn't be fixed. They argue, persuasively, that kids who are hungry won't learn. But they also make the false assumption that students actually eat the meals that the government subsidizes. Rhode Island is proving that students' nutrition levels can improve dramatically when subsidies for school meals are slashed.

This academic year, the state of Rhode Island radically reformed its school-lunch program by dumping a quarter-century of centrally planned purchasing, hiring, and cooking. The state cut its $11-million school-lunch appropriation to less than $200,000 and fired all but 11 of the 780 workers who administered, cooked, and served the lunches. Now, private food-service contractors like Marriott and ARA Corp. plan the menus and feed the students. The school districts still get reimbursement from Washington, but the federal money is sent directly to the local districts on a per-meal basis. As a result, combined federal and state subsidies have fallen from more than $23 million in 1993-94 to $12 million—a 48 percent cut.

The result: Kids are eating better. In the past seven months, student participation in school-lunch programs has soared, nutrition levels have risen to among the best in the nation, and poor school districts like Woonsocket are generating a profit.

Brandon Powers, a sixth-grader at Woonsocket Elementary School, says the only downside of the privatized system is that it has put an end to daily "school-slop sculpture contests." "Now the food is pretty good," he says, "so people prefer to eat it rather than build with it." Even Desrosiers, now a cook for Marriott, eats it every day.

Students at North Smithfield High School now eat their hamburgers instead of conducting experiments on the effects of mustard, catsup, and relish on burger flight. And students at a magnet high school in Providence no longer request extra gravy with their mashed potatoes just to provide greater contrast for finger-painting with their food.

School officials back up students' claims that they are eating more. Since a private contractor took over Woonsocket High School's lunch program, janitors haul away 75 percent less garbage from the school cafeteria. Irene Scripsack, the business manager for the North Smithfield school district, says her janitors only collect 5 percent as much garbage as they used to. Scripsack won't say how often she ate the state's food, but admits it was "quite rare."

"The state-run program suffered from what I call 'orange-ravioli syndrome,'" says John Caparco, the principal of Woonsocket High School. "Just providing food students should eat does not mean they'll eat it. They were simply out to lunch when it came to making the food appealing." Caparco admits even he didn't eat the old food. "Now I get it all the time."

Ellen McKenna, a junior dietetics major at the University of Rhode Island, demonstrated that plate waste was cut dramatically at schools that used private contractors. For instance, she found that most of the hot-food trays were "completely cleared of food" before they were emptied in the trash at Marriott's Potter-Burns Elementary School cafeteria in Pawtucket, where 32 percent of the students are eligible for free or reduced-price meals. Likewise, at ARA's Central Falls Elementary School, where 89 percent of the students qualify for free or reduced-price meals, students ate almost all of their carrots, breads, burritos, and sandwiches.

At the state-run cafeteria at Lonsdale Elementary School in Lincoln, a wealthier community where the state-administered program had not yet been phased out, students were "picking at their food," rather than eating it. On the majority of the trays, most or all of the rice, bread, and fruit had been left uneaten. McKenna reports that students had difficulty identifying the food, and tended to push it around the tray rather than eat it. For instance, one student said he couldn't identify his ham-salad sandwich. McKenna described it as a "pink mush on a roll."

After privatization, not only are students eating more of the meals on their trays, but more of the kids are buying meals. In Woonsocket, for instance, where more than 77 percent of the students qualify for free or reduced-price meals, participation has soared under Marriott's direction. During the 1991-92 school year, this "severe-need" district served 2,652 lunches a day. Now it averages 3,486 lunches daily—a 31 percent increase. Similarly, under the state-run system, Woonsocket only served 288 breakfasts daily; now it serves 597—a 107 percent increase.

Woonsocket is the rule, not the exception. In Providence, where more than 70 percent of the students receive free or reduced-price meals, participation has increased 22 percent since a private vendor took over the cafeterias. And wealthy school districts, like North Smithfield, have recorded 25 percent more students eating school lunches since the state system folded.

Between bites of a chicken-patty sandwich, Pauline Goin says she and her friends rarely bought lunch when the state ran the cafeteria, because the food was always a mystery—in both appearance and taste. "The other stuff was, you know, welfare food, and it tasted like it," the sixth-grader says bluntly. "This stuff is regular food—you know, for humans."

Greater participation seems to improve discipline during the once-raucous lunch period. Woonsocket's Caparco says that the time his office spends handling discipline problems has been cut by about 20 percent. "If the kids are eating, it's harder to be fighting," Caparco notes.

Have It Your Way

Ruth Eshelman, a nutrition professor at the University of Rhode Island, says that options are essential to students' satisfaction. "If I have a choice, I am much more likely to eat what I choose," Eshelman said. "If I have to eat carrots, they will be terrible, but if I pick carrots over green beans, the carrots might be wonderful."

The state-run school lunch program offered no choice. Each week, newspapers across the state printed the upcoming menu with a total of five listings—the entire state had one option each school day. Private vendors, on the other hand, offer about 20 alternatives daily. Woonsocket High School students, for instance, can now choose from five meats, several cheeses, and two kinds of bread in the deli line. They can also pick from a list of three or four hot sandwiches, two salads, and a pasta dish. In addition, the menu offers pizza and burritos. Even if the student tires of these regular items, several specials are offered each day. Students also choose from a selection of fresh fruit and vegetables at every meal. And parents are sent a monthly menu describing each day's choices and their nutritional value.

Private vendors also increase participation by using name brands: Pizza is supplied by a local Domino's franchise, and burritos are cooked according to a Taco Bell recipe. The name-brand packaging and advertising raise the likelihood that students will actually like the meal.

Private vendors recognize that student involvement is vital to customer satisfaction. In Woonsocket and Providence, groups of students and parents meet monthly with Marriott's food-service directors. Dina Dutremble, Woonsocket's business manager, says the state never responded to local concerns; private contractors, on the other hand, conduct weekly taste-tests.

Sandra Caron, a senior at Woonsocket High School who is a vegetarian, says that these meetings have allowed her to buy her lunch at school for the first time. After explaining to the food-service director that she and several other students would be willing to buy lunch if vegetarian entrées were more readily available, the company promised to look into it. "I suspected they would do what had always happened. Nothing ever happens," Caron says. "But within two weeks, there was a vegetarian item on the menu every day."

Ellen Haas, a USDA official who supervises the school lunch program from Washington, doesn't trust the private sector. She insists that devolution to local districts, like Rhode Island's privatization initiative, will lead to "short-term malnutrition and a lifetime of serious and costly health problems." Her fears were echoed by House Minority Leader Dick Gephardt, who equated devolution to "a dagger pointed at the hearts of our children." But a careful review of nutritional data demonstrates that Rhode Island's new, private programs outperform its state-run lunches. Haas's office did not return several phone callls.

Current USDA regulations require that school lunches provide at least a third of the Recommended Dietary Allowance (RDA) of seven nutrients—ranging from vitamins A and C to iron and thiamin. Rhode Island's state-run school-lunch program, however, did not meet these minimums. Bethany Algier, a nutritionist with Rhode Island's Department of Health, notes that a 1991 nutritional audit of the school-lunch program found that the state's program fell short in vitamin C and iron and did not meet the target for calories. Plus, this audit assumed implausibly that the students were eating everything on their trays. Although liberals can speak of the value of mandating nutrition levels, Rhode Island demonstrates that these mandates are not even enforced, and it is impossible to ensure the students will even eat the food.

The private vendors, however, combat both these flaws by providing more nutritious meals that the students actually want to eat. According to the Department of Health's nutritional audit, Marriott's menus exceed the state's program by at least three-fold in each of the RDA's seven nutrient categories. In fact, the private-sector program provides students with more than double the RDA of vitamin C, protein, and vitamin A—600 percent of the federal minimum for school lunches.

In addition to the RDA nutrients, the private vendors' meal plans have less fat, cholesterol, and sodium and more fiber than Rhode Island's state-run program. Over a 10-week period, the average Marriott lunch contained 33 percent less fat, 40 percent less cholesterol, and 40 percent less sodium than the state's lunches. Marriott's average lunch contained only half the saturated fat and twice the fiber of a government lunch.

Desrosiers and other cafeteria workers don't find these numbers surprising. In the private kitchens, fruits and vegetables rarely come from the can, since the two leading companies, ARA and Marriott, can use their buying power to get price breaks on more nutritious fresh and fresh-frozen produce. In North Smithfield, the independent school-lunch program has promised parents that it will never deep-fry a single item it sells; it even uses low-fat mozzarella cheese on its pizza. This district's hamburger meat contains about 15 percent fat, while the state-run program never used beef with less than 30 percent fat.

Most remarkable, however, is that private vendors don't just provide healthier meals that students will eat, they do it at a profit. Like discount book chains, Marriott and ARA make money selling a high-quality product cheaply by counting on high volume. The per-meal federal reimbursement formula gives the contractors an incentive to provide nutritious meals that kids will like, because the more meals they induce kids to buy, the greater their margins beyond fixed costs. So far, the strategy has paid off.

The secret to making it all work is the plan's clever payment system. The complicated arrangement provides the private contractor with an incentive to feed more students and allows the school district to keep most of the profits. School districts pay the contractor an annual fee to run the program. This fee pays for everything from capital improvements to salaries and food. The school district then keeps all the money the students pay. In addition, the district keeps all of the per-meal subsidies Washington sends it. If these revenues fall short of the district's payment to the private contractor, the contractor assumes the loss. This way, the district can't lose money and the contractor has an incentive to keep costs down while serving more meals. If the district turns a profit, the contractor gets a small cut.

Dutremble, the business manager for the Woonsocket School District, says that the school lunches were a daily headache under the state-run program. While the state provided all of the workers, menus, and food, her district had to pay for high-priced food-service equipment out of its local operating budget. These costs were often so high that some school districts could not afford "sneeze guards" in their serving lines.

Under Marriott's direction, the program is self-sufficient and has already turned a $42,000 profit this year, most of which the district keeps. In Woonsocket, the money is being used to purchase a new $30,000 dishwasher and a truck to deliver meals more efficiently to the elementary schools. Providence's program will profit by more than $100,000 this year, and North Smithfield was $5,000 in the black as of January 1.

In addition, fears that poor or small school districts would be ignored by private vendors are unfounded. In fact, poorer school districts—such as Woonsocket and Providence—are considered more desirable contracts for private vendors. These students are less likely to bring a lunch than their more affluent peers and therefore participation rates rise more dramatically when the food improves. Small school districts in Rhode Island joined together to negotiate joint competitive contracts. Lastly, the state limits the threat of corruption by putting the program out for bid frequently. Rhode Island prohibits school-lunch contracts of more than a year, and limits the number of renewals.

Rhode Island's experiment with privatized school lunches is the brainchild of a state legislator, Paul Crowley. A restaurant owner, Crowley was appalled to discover wages in state-run cafeterias were more than $4 per hour higher than at private restaurants, while nutrition levels were substandard.

For years, Crowley's efforts to privatize the program were blocked by state-employee unions. Two years ago, however, Crowley found that the Providence school board had conducted a study showing that a private vendor would save the district more than $600,000 a year. School officials there said they abandoned plans to privatize their program under union pressure. Crowley said the unions even sent busloads of lunch workers to their meetings. After public hearings, Crowley amended the state's Fiscal Year 1995 budget to phase out the school-lunch program this school year. Under the new system, local school districts—rather than the state—are reimbursed directly from the federal government. As in all states, students pay some, all, or none of the lunch cost depending on their parent's income; Washington coughs up the rest.

"We should be in the business of teaching, not feeding," Crowley says. "If other people make a better mousetrap, it makes more sense to buy theirs than build your own."

Although school-district officials universally praise the private-sector lunch program, some are concerned about the GOP's block-grant proposal. Providence officials, for instance, expect the district-wide student body to increase by at least 800 kids next year, and fear that the block grant will not cover extra meals. But Crowley claims the program will still thrive under the block grant proposal. As a district's population increases, more students will buy meals. Since private contractors get paid on a per-meal basis, a larger student body would compensate for a reduction in per-student dollars.

Rhode Island is evidence that converting federal funds to block grants can only improve the nation's school-lunch program. Given full responsibility for the programs, Crowley predicts more states will turn to innovative private alternatives that cost less and maintain higher standards.

In fact, Crowley believes if school lunches had been devolved years ago, Rhode Island would have privatized sooner. "We have found that local districts are best off when they handle this on their own," Crowley said. "Blockgranting can only help us continue on this path."