Connecticut Education Funding Increase Aligns with Research by Professor Liscow

To provide equitable education opportunities for all K–12 students, Connecticut legislators included an additional $150 million in the most recent state budget to benefit lower-income school districts. The decision is in line with recommendations outlined by Professor of Law Zachary Liscow ’15 in a 2017 paper in the New York University Law Review on equitable state funding. In a Q&A, Liscow discusses his research and the impact he hopes this budget increase will have on New Haven public schools and across the state.

What does your paper argue?

My paper, “The Efficiency of Equity in Local Government Finance,” argues for more state and federal funding of lower-income school districts. There are two main sets of reasons to do this. 

Liscow’s paper argues that more state and federal funding for lower-income school districts is not only fair but efficient. 

The first is to promote fairness. Students in low-income school districts should also have good educations. But this is hard to finance out of the low property tax bases of low-income communities. This requires a role for the state and federal governments to provide funding for low-income districts. In fact, many state supreme courts (including Connecticut’s) have required state governments to provide funding to lower-income school districts.

I also explore a second reason for state governments to provide more funding for schools in low-income districts: to promote economic efficiency. This reasoning has flown under the radar, but it is important, especially as Connecticut seeks to build economic clusters of activity in cities. Here’s the logic: When schools are financed purely locally, there is a strong disincentive for people to move to low-income communities because schools will tend to be poor and taxes will tend to be high. This is economically inefficient. We want people to live where they are most productive and happiest, not to have to distort where they live because of these artificial costs arising from whom you happen to live near. I test this empirically, looking at whether people return to low-income cities after those state supreme court holdings requiring more funding for schools in those areas, and they do — a lot. This suggests that, as states like Connecticut seek to encourage productive, dense agglomerations, this school financing has played an unheralded role in bringing that about. And that’s good.

How did you undertake this research and which recommendations from your paper did the Connecticut state legislature adopt?

I undertook this research because I think that it’s important that all children receive a good education. And I had the opportunity to show that this second argument — that promoting strong educations in low-income communities also promotes economic efficiency by effectively allowing people to choose where they want to live — is also important, to further emphasize the importance of equity in school finance.

The paper, using real-world observation, finds that people return to low-income cities when state funding of schools increases. This results in more economically productive cities.

Thankfully, the legislature in recent years has done exactly as my paper suggested: It has increased funding for schools in low-income communities, which is great for children in those districts and for the overall economy of the state.

How do you hope the funding will positively impact New Haven and its public schools? 

There is excellent evidence from top scholars like Kirabo Jackson, Rucker Johnson, Claudia Persico, Diane Whitemore Schanzenbach, and Jesse Rothstein that increased funding for schools lessens educational disparities and improves educational outcomes. Improving the quality of education for public school students in New Haven is very important. More generally, the funding makes New Haven a better place to live, with better public schools and — given this state aid — without even higher property taxes than the city already has. If history is a guide, with time, this will help draw in more residents and make it an even more vibrant place to live and work.