Boston Fed senior economist Bo Zhao has developed a way to reduce or even eliminate the inequity and inadequacy that for decades has characterized Connecticut’s K–12 public school funding.

In a webinar with state municipal and education leaders, Zhao unveiled a new method for estimating what it would cost each district to provide the quality of education needed for its students to achieve a common level of performance, as measured by standardized testing. He explained that this estimated cost is based on student characteristics and other conditions beyond the control of local officials when efficiency is held constant among school districts.

The event, which took place Sept. 17, was cohosted by the Boston Fed’s New England Public Policy Center and the Connecticut Conference of Municipalities, a nonpartisan organization of municipal leaders.

Zhao showed the event’s participants, who included Connecticut school administrators and elected officials, the gaps that exist in many of the larger, lower-income districts between the estimated education costs and the current funding.

He noted that more than half of the state’s public school students were enrolled in a district where the estimated cost to reach the statewide average student performance level exceeded the actual spending. Zhao pointed out that the poorest districts tend to have the highest costs and therefore the largest spending gaps, which can have important consequences.

“There’s a clear positive relationship between the spending gap and the performance gap,” he said. “The larger the spending gap, the larger the performance gap.”

Zhao’s presentation was based on research he conducted for a Boston Fed report titled, “Measuring Disparities in Cost and Spending across Connecticut School Districts,” and a more technical Boston Fed working paper titled, “Estimating the Cost Function of Connecticut Public K–12 Education: Implications for Inequity and Inadequacy in School Spending.”

“Our hope at Connecticut Conference of Municipalities is not simply that this research will spur conversation, as we’ve had a lot of conversations on these issues, but that it will actually drive necessary and needed reform,” Joe DeLong, the executive director and CEO of CCM, said in his welcoming remarks.

Panelists and other participants agreed that Connecticut’s current funding formula, known as the Education Cost Sharing (ECS) formula, is not serving its intended purpose of providing equitable and adequate funding across the state’s school districts.

“This formula does not achieve what it wants to achieve,” said Stamford Mayor David Martin during the Q&A session that followed Zhao’s presentation. “It is part of continuing the economic disadvantage of people.”

Hartford School Superintendent Leslie Torres-Rodriguez, one of the webinar’s panelists, expressed a similar sentiment.

“We can’t continue to base our budgets and state aid on what we’ve done in the past, because it’s not working, and we do need analysis and research like (Zhao’s) report to help us set goals that will potentially result in better outcomes for our students,” she said.

In Zhao’s analysis, districts’ education costs are determined primarily by four factors that he has identified through regression analysis: the percentage of school-age children living in poverty, the percentage of students living in single-parent or non-family households, whether a district’s enrollment is larger or smaller than 2,000, and whether it is a regional or local district.

“The study highlights that we need to spend more in some communities to bring those communities up to the same level that other communities spend,” said New Haven Mayor Justin Elicker, a panel member and a former teacher.

“In New Haven, we talk about funding education on par with our suburban neighbors,” Elicker said. “We look at how much our suburban neighbors are spending on students, and that is oftentimes what we set our goal as—if only we could spend as much as New Canaan spends on its students. But in reality, and (Zhao’s) study underscores this very effectively, we need to spend much, much more on many students in New Haven (a lower-income city) than New Canaan (a wealthy suburb) does on their students.”

Zhao recommends adopting his cost measure as the basis of a new formula that would allocate more aid to districts with higher, uncontrollable education costs.

Following Zhao’s presentation, panel member Douglas McCrory, a state senator who worked as a teacher and school administrator in Hartford for 18 years, expressed concern about the state legislature’s willingness to follow Zhao’s recommendation.

“Among my colleagues, the first question will be, ‘How much more money is my school district going to get? Or, how much money will my school district lose?’” McCrory said.

Zhao noted that he is currently writing another report on how to design a funding formula based on the cost measure and property tax base that incorporates certain tools to make the formula more politically feasible.