Journal of Social Sciences 1 (3): 162-165, 2005 ISSN 1549-3652 © 2005 Science Publications Corresponding Auhor: Mark P. Gius, Ph.D., Professor of Economics, Quinnipiac University, Hamden, CT 06518, Tel: 203-582-8576, Fax: 203-582-8664 162 The Effect of the American with Disabilities Act on Public Education Expenditures Mark P. Gius Department of Economics, Quinnipiac University, Hamden, CT 06518 Abstract: Section 504 of the Rehabilitation Act of 1973 and the American with Disabilities Act (ADA) of 1990 were enacted in order to protect the rights of individuals with disabilities. These two laws have had a major impact on public schools, their offerings of services and their budgets. The purpose of the present study was to determine if passage of the ADA in 1990 has resulted in a statistically-significant increase in per student public education expenditures at the state level. Although numerous studies have estimated educational cost functions, no prior study has examined the impact of the ADA on per capita educational spending. Results of the present study indicate that the ADA did not have a statistically-significant effect on public educational spending at the state level. Several of the leading drivers of per student educational spending included population density, per capita income and percentage of the state that is over the age of 65, all variables that school administrators and policymakers have little control over. The only two variables that policymakers have control over and that have a significant impact on spending are student-teacher ratios and the overall educational tax rate. Hence, if states want to cut public school spending, the only two avenues open to them are cutting taxes or increasing class sizes. Key words: Disabilities act, public education expenditures, educational cost functions INTRODUCTION Section 504 of the Rehabilitation Act of 1973 and the American with Disabilities Act (ADA) of 1990 were enacted to protect the rights of individuals with disabilities. Section 504 applies to only organizations that receive federal funding, while the ADA applies to all organizations, except churches and private clubs [1] . These two laws have had a major impact on public schools, their offerings of services and their budgets. When Section 504 was first enacted into law, it had little effect on education; then, in 1975, the Education for All Handicapped Children Act, now called the Individuals with Disabilities Education Act (IDEA), was passed and the way in which public schools served students with disabilities was altered dramatically. IDEA, which was accompanied by federal funds, was the primary impetus for school districts initiating and expanding services for disabled students; Section 504 and the ADA were considered less important, at least initially, primarily because they provided no federal funding [1] . Recently, however, Section 504 and the ADA became more important for school districts, especially in the way in which schools served students with disabilities. The primary reason for this shift in importance is due to the way in which disability is defined and the way in which eligibility for program services is determined by the ADA and Section 504 as in comparison to IDEA. Under IDEA, children must fit into one of the specific categories of disabilities that is recognized by the law in order to obtain services. Section 504 and the ADA, however, define disability much more broadly; all that these laws require is that students have a physical or mental impairment that substantially limits one or more of the student’s major life activities. For most students that are qualified to receive services under these acts, learning is the major life activity that is most affected; however, any restricted life activity would allow these students to be eligible for services under Section 504 and the ADA [1] . Given this shift in focus, more and more parents began requesting services under the ADA and Section 504, thus putting additional pressure on already strained educational budgets and assets. Although the vast majority of disabled students who qualify for services under these acts require nothing more than minor accommodations, such as testing modifications or the use of readers, some disabled students require much more extensive accommodations, including home- schooling, special transportation, or publicly-provided educations at private schools that are more able to provide the necessary accommodations. The reason for these potentially costly accommodations is that schools must provide non-discriminatory and free public education for all students. Disabled students must be allowed to participate in all activities that are available for students without disabilities, including extracurricular activities [1] . The purpose of the present study is to determine if passage of the ADA in 1990 has resulted in a statistically-significant increase in per student public