Estimating the Cost Function of Connecticut Public K–12 Education: Implications for Inequity and Inadequacy in School Spending 
This paper’s study of Connecticut’s education costs can serve as the foundation of an equitable and adequate state education aid formula. To the best of the author’s knowledge, it is the first cost function study of Connecticut public K–12 education. The author uses a regression model to estimate how much it costs each district to achieve a common student performance target level, as measured by statewide standardized testing, given student characteristics and other cost factors that are outside the direct control of local officials at any given point in time. The analysis shows the disparities in education costs across school districts and the equity and adequacy of each district’s spending relative to its costs for achieving a common student performance target level.
Key Findings
- When student performance and district efficiency are held constant, school districts have to spend more if they have a higher rate of school-age-child poverty, a higher percentage of students living in single-parent or non-family households, or an enrollment smaller than 2,000 students, or if they are a regional school district.
- Districts with the largest enrollments, the highest rates of school-age-child poverty, or the least amount of property wealth, on average, have the highest cost indices (a district’s predicted spending per pupil compared with that of a hypothetical average district) and the lowest cost-adjusted spending (the current spending per pupil divided by the cost index).
- A large share of Connecticut’s public school students are enrolled in school districts where spending is inadequate relative to the predicted cost for achieving a common student performance target.
Exhibits
Implications
This paper’s findings suggest that many Connecticut school districts need to increase their spending to meet their predicted costs and close the gaps between their student performance levels and the common target. While the need for additional spending is widespread, districts with the highest cost indices, on average, require the most additional spending per pupil. Meeting this need would likely require more state aid.
Although this study is based on Connecticut data, it could be relevant for other states that face similar challenges in providing adequate and equitable education funding. This is particularly true for states that rely heavily on local revenues to fund school districts, and states where property tax is virtually the only tax revenue source for local governments.
Abstract
Facing legal challenges and public pressures, Connecticut needs an objective and rigorous study of its public education costs. This study is the first to estimate the cost function of Connecticut public K–12 education and to evaluate the equity and the adequacy in the state’s school spending based on regression-estimated education costs. It finds large disparities across districts in education costs and cost-adjusted spending. Districts with the largest enrollments, the highest school-age-child-poverty rates, or the least amount of property wealth, on average, have the highest costs and the lowest cost-adjusted spending. A large percentage of the state’s public school students are enrolled in districts where spending is inadequate relative to the predicted cost of achieving a common student performance target, which contributes to student underperformance. Thus, school districts, especially the high-cost ones, need a large amount of additional spending to improve student performance. The research approach used in this paper can be generalized and applied to other states.