Have you ever considered having them make their own gear? (It's been too long - are there perhaps some other merit badges they could get simultaneously, for sewing, working with tools, etc.?)
Some possible projects include pop-can or cat-food-can alcohol stoves (using empty water bottles like Dasani, etc., for fuel storage, and aluminum flashing for windscreens), ponchos (assuming silnylon or coated nylon isn't hideously expensive), and even (at a higher skill level) frameless packs and tents. (Tarptent and Gossamer Gear used to give away patterns for a basic pack and tent on their websites.) Sleeping bags or quilts are a possiblity, but may well exceed the skill levels available.
Other low-cost options would include using chlorine dioxide tablets instead of filters, and lightweight stainless steel mixing bowl sets (from WalMart or similar; I had one years ago that cost $10, included nesting quart, pint, and cup bowls with plastic lids, and made a great mess kit.) Silnylon tarps are less expensive than tents; the green poly tarps from Walmart are cheaper yet (but a bit harder to use and subject to wear and tear.) Empty bottled water bottles are fine for, well, water bottles. A ziploc bag, some bandaids and moleskin, and a trip to the sample-size counters at the drug store give everyone a start at a first aid kit.
I'm sure others can offer other low-cost gear suggestions for the typical Scout use.
As much as I can. BSA has a policy against alcohol stoves. The actual rule is sometimes hard to interpret, so I just stay away from it. I have had them make super cats, when I wasn't aware of the rule. However, I bought a jet boil for the troop, and a few of the scouts have their own jet boils. So, a stove isn't on the list for scouts to have to buy. Either are tents. I use troop funds to buy tents. I also bought a filter for the troop. You only need one filter for the troop. They take turns pumping. I have my own filter, so we do have a backup. It does make it a little lighter with the troop mentality. One kid carries the stove, one the pot, one the filter, one the canister, one the other canister....etc. I tell them to bring gatorade bottles, but usually buy one for each boy for the trip. The only thing that I really want them to spend money on is the bag. I can usually scrounge around for packs (borrowing from charter organization members...etc), plus I have a few that I bought with troop funds. A bunch have actually taken my advice of buying thrift store ones and replacing the hip belts with MOLLE belts, cheap and comfortable.
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