The bad news comes at a time when more kids need the program because their parents have lost their jobs.
"We know that even if you have a computer on every desk, the school is made of gold ... that if that student goes to school hungry, that student will not be able to learn more," said Jack O'Connell (D-CA School Superintendent).
The federal government and California share the cost. Last year, local administrators scrambled to find money for the final months of school, as demand jumped by 28 million meals statewide. This year, dipping into their bare-bones budget isn't an option.
School districts have already seen $3 billion in funding cut from Sacramento. Since the state's financial situation is worsening, they are slated to see another $2 billion less on top of that.
Clara Santos worries cheaper junk food will be served, or her two sons will be cut off completely.
"Taking it out would be like taking away some of the books that they require, or some of their computers," said Santos.
More than half of California's public school students, or 3.1 million kids, use this program. For many, this is the only nutritious meal they'll eat.
"I like the healthy food they give me here," said Giovanni Chagolla-Herrera, a 1st-grade student.
With the state running out of cash, school districts may have to choose between classroom supplies or feeding their students.
"It's a cruel irony, now that as the economy gets worse, we have more people forced into poverty," said Assemblyman Kevin DeLeon (D-Los Angeles).
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