Florida Governor Ron DeSantis rushed to punish Disney last week, stripping the company of its special tax status after it criticized a controversial state law that prohibits teachers from talking about LGBTQ identity to young school children.
In the course of four days, DeSantis and his Republic allies in the state legislature proposed, passed, and signed a law eliminating Disney’s limited self-governing rights. It is scheduled to go into effect next year. But the details are murky and the Reedy Creek Improvement District – the Disney-controlled entity that served as a quasi-government – said it will continue to operate as usual.
In a note to investors, Reedy Creek said that the 1967 law that granted the self-governing rights contains a provision that would force the state to assume its debts upon dissolution. Until Florida accepts those debts, Reedy Creek’s special status is still in effect, they argue.
Reedy Creek currently has about $1 billion in outstanding bond debt, according to the credit rating agency Fitch Ratings.
The Washington Post explains:
That’s what worries local government officials, who fear that $1 billion in Disney bond debt will be dumped on them. Some analysts say the new law could mean a 20 to 25 percent property tax hike in nearby Orange and Osceola counties, which local government officials said would be “catastrophic.”
The Post also notes that “under the terms of the Reedy Creek Improvement District, Disney was responsible for providing all social services within its theme park, including garbage collection, road repair and fire and emergency responders.”
Therefore, if Reedy Creek is dissolved, the state would have to pay for those basic services.
The Post reports:
At a monthly meeting in the Reedy Creek Improvement District on Wednesday morning, the president of the firefighters’ union stood up to question the district’s board of supervisors about the uncertainty facing his members.
“I ask you guys as the elected board, what reassurances can I bring back to my employees, as far as the future of their employment here?” said Jon Shirey, 37, who has been president of the union for two years. “What can I tell our retirees about the benefits they have earned by completing so many honorable years of service to the district?”
Board members did not answer.
Multiple reports indicate that Disney and Reedy Creek are preparing a legal challenge to the law stripping them of their special tax status. But even if its ultimately overturned, DeSantis has already won a major fundraising coup. More from The Post:
DeSantis, who is seen as a strong potential candidate in the 2024 presidential election, used his fight against Disney to fundraise. His main political committee collected more than $7.2 million the month after he started criticizing the company, a monthly total the committee exceeded only three other times in the past 18 months, campaign finance records show. DeSantis’s reelection account collected another $1.2 million in March.
State Rep. Carlos Guillermo-Smith (D), whose district includes parts of Orange County, said eliminating firefighter jobs and raising taxes are not winning issues for DeSantis. He also said simply tinkering with the Reedy Creek district won’t mean much, and while going after corporate tax breaks could make a difference to Disney’s bottom line, neither DeSantis nor GOP lawmakers have suggested that.
“People understand that this is all just political performance,” Guillermo-Smith said. “In the end, what will he accomplish? So maybe Disney won’t be able to build a nuclear power plant. Is that really going to make DeSantis look like such a tough guy?”
