Walt Disney World feels backlash of Florida politics
Walt Disney World and the two counties it is located in are facing an uncertain financial future after Florida’s Republican-controlled legislature voted to dissolve the special tax district that effectively runs the vast theme park empire.
In a move that has left local officials gasping at its potential impact, the state needed just 72 hours to create a bill and agree to dissolve the Reedy Creek Improvement District (RCID) — the tax district created by the legislature in 1967 that allows Disney to operate as an independent entity — and completely remove the company’s ability to self-govern.
The elimination of Disney’s special status will come into effect in June 2023, and the full ramifications for both the company and Orange and Osceola counties could take months to ascertain, as they involve up to $2 billion in RCID bond debt and the loss of around $163 million a year in taxes.
Financial experts believe these huge amounts would almost certainly fall on local residents, resulting in big local property tax increases, while the loss of Disney’s self-governance could seriously impact future development and cause job losses.
The whole situation started in March when Disney Chief Executive Officer Bob Chapek announced the company’s opposition to the state’s new Parental Rights in Education Law, which critics have dubbed the “Don’t Say Gay” bill due to its prohibition of discussion on LGBTQ issues “when not age-appropriate or developmentally appropriate for students.”
That opposition, plus Chapek’s insistence that all company donations to the Republican party would be “paused,” immediately earned the wrath of Florida Governor Ron DeSantis, who insisted, “I will not allow a ‘woke’ corporation based in California to run our state. Disney has gotten away with special deals from the state of Florida for way too long.”
And, after threatening to target the Reedy Creek district for termination in retaliation, DeSantis suddenly added the issue to a special session of the Florida legislature on April 19, 2022, that was due to discuss a new election redistricting map.
In just three days, the abolition of RCID was drawn up, put to a vote, and rammed through on party lines with no discussion of the potential effects and the massive financial repercussions of RCID’s debts and taxation liabilities that will ensue next June.
According to legal experts, RCID’s current bond debt for recent and ongoing infrastructure work could be anywhere from $997 million to $2 billion, and Orange and Osceola counties would be on the hook to cover the amount come June 2023.
In addition, the loss of the District’s annual $105 million in service taxes and $58 million in bond taxes to the two counties would also need to be made up by local residents, with the lion’s share falling on Orange County, which is home to more than 75 percent of Walt Disney World.
Orange County Tax Collector Scott Randolph insisted, “[The Florida legislature] basically dissolved something the size of the city of Orlando in 72 hours. That’s what they’ve put into play. I don’t see how Orange County doesn’t raise property taxes by 20 to 25 percent. That’s what [the county] would probably have to do to cover this financial situation.”
Orange County’s Democratic Mayor Jerry Demings added, “I believe they have not adequately contemplated the ramifications of what they have proposed at this point. It’s obvious this is political retribution that is at play here.”
The likely effect on Walt Disney World itself remains to be seen. In the short term, it stands to gain a substantial tax cut, with RCID’s liabilities being passed on to the county authorities, along with responsibilities for things like the Reedy Creek Fire Department, water, and power utilities.
Road maintenance would become the obligation of the Florida Department of Transport, and Disney would need to go through either Orange or Osceola counties for all future infrastructure project permitting.
That alone would spell delays for any theme park expansion and upgrades beyond those already under way, while the future of recently announced projects such as a massive new solar power plant and a plan to build 1,300 affordable housing units would also be thrown into confusion.
To date, Disney has not commented in any way on the vote to dissolve RCID, and it is likely they are weighing up their legal and financial options, which include taking the state to court over either First Amendment rights or legal precedent.
For Chapek, it represents a huge challenge to his executive acumen as he has already lost a major tactical battle with DeSantis and put the company in a financial bind.
The next few months could determine whether Florida’s biggest employer is able to move forward with any surety — and whether the company ends up looking for a new chief executive.
Read the bill!!!! It’s NOT don’t say gay.
Disney and all other theme parks need to stay out of politics!!! It’s a Theme Park.
Couple things aren’t accurate.
First-the Homestead Act limits property taxes, so there won’t be a 20-25% increase
Second- I spent some time trying to research all this. But wanted post this so people would understand the debt situation of Reedy Creek. I’d link the information but not allowed
“Generally independent districts can be dissolved by the same procedures as they were created. If a special district is declared inactive by the Florida Department of Economic Opportunity, its property or assets are subject to legal process for payment of any debts. After the debts are paid, the remainder of the assets or property goes to the county or municipality where it is located.”
The CEO and Bd of Directors have betrayed the shareholders to whom they have a financial obligation. Time to clean house and bring in wiser leadership.
Disney’s core business is FAMILY entertainment and has been for years. Leave politics out of your business and get back to paying your stockholders their due dividends.
Time to get rid of DeSantis. His only motivation is to rile up his GOP base for his bid to become President in 2024 (which will not succeed). He is generating hate and division in America as other states like Texas are doing. They are attacking women’s rights, the LGTB+ community, minorities, free speech, etc. Remember your history and the dictators that have come before. Look at what Putin is doing to Ukraine. Have we forgotten how Fascism starts? Is this what you what America to become? Yes, we should all be “woke”! Wake up America!
WOW! Attractions Mag is about as one sided as the rest of the lib world. There is soooo much false crap in this article it’s not even funny. How about the bill…. It’s zero talk about all sexuality for those students. Teachers can’t pass their liberal gay talk and conservatives can’t tell a kid they are going to hell for being gay. Funny how nothing gets reported on that side. It’s a positive for everyone. Course it only gets reported one sided.
Disney shot their mouth off to appease their employees and are now receiving the consequences of their actions. If they didn’t want this they should’ve kept their mouth shut.
Mr. DeSanis is going to end up with Daisy Duck egg all over his face. This thoughtless, petty act will backfire when the financial and economic ramifications become clear. Disney’s self-governing county is highly efficient, well-organized and has been a financial powerhouse for all of Florida. The state will likely have to repeal the “repeal.” Another certainty: Disney will not back down, because its employees are justifiably outraged at this vicious attack on their gay colleagues. Mickey Mouse will be around long after DeSantis and his hatemongering are gone.
In the United States, the Constitution says you are allowed to voice your political opinion without fearing an attack by the state. What the Florida GOP has done here is tyrannical.
MG – “liberal gay talk”? How biased are you? The pot calling the kettle, black! How do same-sex parents who are teachers answer questions asked about them in class? How do students talk about their same-sex parents in class? Censor them? Just ignore them? Telling someone that they are going to hell for being gay is bullying and just plain hateful and needs to end. Not everyone believes in the same god, religion, or even the existence of supernatural beings. It is certainly not in our Constitution. You can’t use your religious beliefs to punish people. America is a democracy, not a theocracy. No religion rules. If companies can be treated as people (Hobby Lobby ruling), then companies can voice their concerns over equality and injustice and choose to not support those who marginalize others. You need to review your history. When people don’t speak out, then that’s when apathy causes pain and suffering in our world and the autocrats and dictators take over. Do you see what’s happening to Ukraine or are you blind?
Genius! How much money is it going to cost to take over the roads, police and fire from Disney?
Ernie you are correct
Mr DeSantis will not be President in 2024
However he will be Vice President to Donald Trump when he wins the election
As far as “generating hate and division” have you been paying attention to just how divided the country has become in the last 15 months under the current administration and its policies
Regarding attacking women’s rights, I consider it more of an attack on women to have a “man” competing in women’s sports and unfortunately beating all the women who have worked hard at their sport and are competing righteously
And finally regarding your fascism comments, it is the Democratic Party who demanded vaccine mandates and mask mandates in an attempt to control the populace
PLUS, those counties would have to buy or lease all of the infrastructure Disney has paid for. Roads, fire stations, all vehicles and mobile equipment supporting them, water and electric plants and distribution, etc. and then they’d have to pay Disney every year to lease the property they are built on, because Disney will not sell the property to anyone. Property tax increases are capped, so you’d see raised employee taxes by the counties and massive sales tax increases to pay for this fiasco.
And no, Disney isn’t going to go stand in line to get permits either. They’ll work out some agreement to have the counties employ special permitting personnel and inspectors just for Disney projects.
Crazy comments on here. “because Disney will not sell the property to anyone” Eminent domain applies here. Thank you Disney for your contribution to the public good (fire, streets, water, etc). Those things are required to be built by land developers (including schools). In addition, Disney is going to be hit with huge tax bills to support those things among others. This is the reason for the governor stating that “Disney has gotten away with special deals from the state of Florida for way too long”. The taxman has cometh and Bob Paycheck will probably be looking for a new job at some point.