The Impact of the Americans with Disabilities Act on Per‐Student Public Education Expenditures at the State Level: 1987–2000

I Introduction SECTION 504 OF THE REHABILITATION ACT of 1973 and the Americans with Disabilities Act (ADA) of 1990 are designed to protect the civil rights of individuals with disabilities. The intent of these federal statutes was to prevent any form of discrimination against persons with disabilities who are otherwise qualified. Section 504 applies to all organizations that receive federal funding, while the ADA applies to all entities, except churches and private clubs (Smith 2001). 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 (Smith 2001). 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 in comparison to IDEA. Under IDEA, children must fit into one of the specific categories of disabilities that is recognized by 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 qualified 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 (Smith 2001). 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 education at private schools that are more able to provide the necessary accommodations. The reason for these potentially costly accommodations is that schools must provide nondiscriminatory services and free, appropriate 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. Hence, although the vast majority of disabled students require very little in terms of accommodations, some students require much more costly alternatives to the public education experience (Smith 2001). 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 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. In addition, this study is unique in that it uses a panel data set consisting of all 50 states for the years 1987-2000. The use of panel data should allow for the control of potentially important but unobserved heterogeneity among the states in the data. Results of the present study indicate that the ADA has a statistically significant impact, albeit a minor one, on per-student education expenditures at the state level. …