Florida Governor DeSantis signs legislation revoking Disney’s special district status

View of the Walt Disney statue in front of Cinderella Castle in Magic Kingdom Park at Walt Disney World Resort in Lake Buena Vista, Florida.

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Florida Gov. Ron DeSantis signed legislation on Friday repealing the Walt Disney Company’s special district status in the state, just days after the law was first introduced on Tuesday.

The bill, which would disband the Reedy Creek Improvement District, passed the state Senate by a 23-16 vote on Wednesday and the state House of Representatives on Thursday by a 70-38 vote.

Disney has so far declined to comment on the legislation, but the dispute is likely to end up in court.

For more than five decades, Disney has been able to make additions to its recreation area, including new theme parks, hotels and other tourism experiences, without interference from local counties. That is set to change in June 2023 after DeSantis signed the law into law.

DeSantis, widely viewed as a contender for the 2024 GOP presidential nomination, is embroiled in a bitter and public feud with the entertainment giant over the company’s denunciation of Florida’s HB 1557 law last month. While supporters of the law have denied that it is an act of retaliation against Disney, critics see it as retaliation for the public dispute with the governor.

Reedy Creek was created by the Florida Legislature in 1967 so that Disney could develop the infrastructure for Walt Disney World at no cost to Florida taxpayers. Disney constructed and maintains more than 130 miles of roads and 67 miles of waterways, as well as government services such as fire protection, emergency services, water, utilities and sewage.

Tax experts and lawmakers say the county’s abolition could have unintended consequences for county taxpayers. Disney’s special tax district status allows the company to collect an additional tax on itself to pay for community services, something other districts can’t do. That tax currently totals $105 million a year, said Orange County Tax Collector Scott Randolph. Reedy Creek is also receiving nearly $60 million in additional revenue from Disney to help pay off its bond debt.

Sunsetting Reedy Creek means local counties are beginning to pay for these services without this special status in place. The bill for potholes and emergency services will likely fall on taxpayers.

The counties would also assume Reedy Creek’s debt. According to its financial reports, the district has historically generated losses of about $5 million to $10 million each year. But since Disney can subsidize its own operations with revenue from the theme parks, that debt doesn’t have a huge impact on its bottom line.

According to lawmakers, there is about $1 billion in debt on the balance sheet that taxpayers would be responsible for should the special district be absorbed, resulting in higher taxes.

And it won’t be easy to save those budgets. State laws prohibit counties from imposing sales taxes or charging fees to cover expenses, and they must tax all areas of the county equally. So whatever they enact will apply to everyone.

Randolph said the county will likely need to increase property taxes by 20% to 25% to make up the difference.

https://www.cnbc.com/2022/04/22/florida-gov-desantis-signs-bill-revoking-disneys-special-district-status.html Florida Governor DeSantis signs legislation revoking Disney’s special district status

Gary B. Graves

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