Takeaways from the 2026-27 Minnesota Governor’s Biennial Budget

What’s changing:
Clarifies that nonprofit food service funds may only be used for costs directly tied to operating the food service program.

Cost:

• Cost-neutral
• No new funding
• No cuts

Why this is needed:

• Federal rules require child nutrition funds to stay within the nonprofit food service account.
• Past audits found that some districts charged administrative supervision costs that were only loosely connected to food service.
• Minnesota Free School Meals guarantees stable revenue, so funds should now be focused on meal quality and program improvement, not indirect costs.

Key clarifications:

• School administrators may not charge time to the food service account unless food service supervision is a primary job duty.
• Food service management companies are no longer responsible for covering account deficits.
• School Food Authorities (districts) are responsible for proper contract procurement and financial management.
• In small districts, the general fund may still need to backstop food service when necessary.

What this does NOT change:

• Meal access
• Free School Meals
• District flexibility to operate food programs

Bottom line:
This locks nutrition dollars inside nutrition, ensuring funds improve food quality and program stability, not general administration.

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Repurpose Summer Food Service Program (SFSP) Incentive Funds

What’s changing:
Redirects $150,000 per year away from SFSP participation incentives and instead pays schools for Summer EBT (S-EBT) data upload work.

Cost:

• Cost-neutral
• Same money, different purpose

Why this is needed:

• SFSP incentive payments have become:
  • Too small to matter
  • Late (December)
  • Administratively burdensome
• Schools now carry significant workload for Summer EBT, but no state funding supports that work.
• Summer EBT reaches far more children than SFSP alone.

How the new system works:

• By September 1 each year, MDE distributes $150,000 to School Food Authorities that:
  • Upload eligible student data to the S-EBT portal
• Funds can be used for staff time and operating costs related to S-EBT administration.

Why this is more effective:

• Summer EBT provides $120 per eligible child for summer groceries.
• In year one:
  • Nearly 460,000 Minnesota children
  • Over $55 million in benefits
• Nationally, only 1 in 6 eligible children access meals through SFSP sites — S-EBT closes that gap.

Equity impact:

• Strongly benefits:
  • Low-income families
  • Communities of color
  • Tribal communities (Tribes qualify as School Food Authorities)

What this does NOT change:

• Summer nutrition funding level
• SFSP availability
• Eligibility rules for children

Bottom line:
This shifts money from a low-impact incentive to a high-impact administrative support, helping schools deliver food directly to families more effectively.