Gov. Ron DeSantis signed a bill stripping Disney World of its status as an “independent special district,” fulfilling his request to punish the Disney company for opposing his agenda on social and education issues. DeSantis wanted to “cancel” Disney’s First Amendment right of free speech.
NPR reported, DeSantis wanted to punish Disney. Repealing its tax status may hurt taxpayers instead:
Disney didn’t agree with DeSantis’ policies on COVID-19 vaccine requirements, or face coverings. The growing rift deepened this spring, as DeSantis accused the entertainment giant of embracing “woke” viewpoints.
“In recent weeks, the tensions heightened when Disney CEO Bob Chapek said he’d support the repeal of Florida’s Parental Rights in Education Act, a measure critics call ‘Don’t Say Gay,’ ” as NPR’s Greg Allen reported.
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The bill will undercut Disney’s autonomy, but it could impose a steep cost on Orange and Osceola counties, where the theme park is located. The two counties would inherit the Disney district’s debts, which officials say would result in higher taxes.
Here’s a quick rundown of the situation:
Does Disney really have its own government in Florida?
Disney gained near-total control over its theme parks and other attractions in 1967, when the state designated the area as the Reedy Creek Improvement District. The land measures 25,000 acres — nearly 40 square miles — in Central Florida.
Disney operates like a county government, building and maintaining municipal services like electricity, water and roads, and providing police and fire protection. It even taxes itself. The setup was intended to give Disney autonomy while also relieving the counties of paying for new services and infrastructure in what was once a remote and rural area.
But Reedy Creek’s status changes under the measure DeSantis signed: Senate Bill 4-C, targets it and five other independent special districts that were created before 1968.
Why will Disney’s debt transfer?
The Florida Senate’s own financial impact analysis of the bill states that in most cases when a county takes over a special district, it “shall also assume all indebtedness of the preexisting special district.” In Disney’s case, that could put local governments on the hook for about $1 billion in bond debt.
The state Senate’s analysis concluded that the bill would have an “indeterminate fiscal impact” on residents and businesses in special districts, as well as on local governments that will assume debts and assets.
The change promises to shake up the local tax picture, according to Scott Randolph, a Democrat who is the Orange County tax collector.
“If Reedy Creek goes away, the $105 million it collects to operate services goes away,” Randolph said via Twitter. “That doesn’t just transfer to Orange County because it’s an independent taxing district. However, Orange County then inherits all debt and obligations with no extra funds.”
Disney also taxes itself around $53 million each year to service its debt obligations, Randolph said.
The situation quickly prompted warnings that county property taxes will sharply rise. Citing an interview with Randolph, Danielle Prieur of member station WMFE in Orlando reports, “homeowners here could see property taxes jump by 20% to make up the difference. And even then, it probably wouldn’t be enough to cover all the money that would be lost.”
DeSantis probably doesn’t care about the property taxes of Orange and Osceola counties, which tend to be Democratic counties. This was not a bug but a feature of his vendetta.
But did you catch that $1 billion in bond debt figure? Now that could affect every voter in Florida. Disney says Florida would have to pay nearly $1 billion to dissolve special district:
Florida faces a big obstacle as it moves to strip Walt Disney World of its semi-autonomous status in the state: what to do with the special district’s nearly $1 billion in bond debt.
The resort complex’s governing board says that when Florida created the Reedy Creek Improvement District decades ago, the state pledged to protect the district’s debt holders — and not to alter its status unless all debts are paid off.
The debt pledge is in the Reedy Creek Act the state enacted in May 1967, the district said in a statement filed with the Municipal Securities Rulemaking Board.
Reedy Creek says the state made several promises to bondholders when it adopted the act, including:
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- Not to limit the district’s ability to “fulfill the terms of any agreement made with the holders of any bonds or other obligations”;
- Not to impair bondholders’ rights, or modify the arrangement until all bonds, costs and expenses “are fully met and discharged”
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Because of those pledges, the district said, it will “explore its options while continuing its present operations,” despite the plan to revoke its standing.
Moody’s Investors Service also cited the pledges as it affirmed its solid investment-grade ratings for Reedy Creek on Tuesday — although the agency did also change its outlook from “stable” to “developing.”
An Orange County attorney who specializes in local government and property litigation says the state’s move wouldn’t hold up under a lawsuit, as member station WMFE reports.
The “Free State” of Florida’s dictator naturally doubled-down by grandstanding on the Fox News fascist propaganda network. In an Orlando town hall with Fox News‘ Laura Ingraham, DeSantis said Disney will be paying their own bond debt.
“It just simply ends with them being treated the same as every other company in Florida,” he said. “They’re going to follow laws. They’re not going to have their own government. They’re going to pay their debts, pay their taxes.”
DeSantis did concede to host Laura Ingram that there will need to be more legislation to address questions raised about tax implications of unraveling Disney’s self-governing status. “There’s going to be additional legislative action,” DeSantis said. “We’ve contemplated that. We know what we’re going to do, so stay tuned.
Bold talk for a dictator who obviously didn’t contempate, nor care about, the tax consequences of what he was doing in the first place. All he knew was that he was satisfying his primal desire to retaliate against Disney. Kind of like what Vladimir Putin is doing to Ukraine.
MSNBC’s Lawrence O’Donnell had a good commentary about this Florida tax fiasco last week.
ODONNELL: And coming up, I have to make a correction to our reporting on Monday night when we said Florida Governor Ron DeSantis had signed a $163 million property tax increase for the counties surrounding Disney World when he signed into law the repeal of Disneys special tax status in Florida.
O`DONNELL: I was wrong. I was way off. It was a billion dollars more than that. If the law to punish Disney goes into effect as scheduled in 2023, Disney will actually be relieved of $163 million in taxes and $1 billion in debt all of which would be shifted to county property tax payers in Florida.
Ron DeSantis is $1 billion stupider than we thought he was. That`s next.
(COMMERCIAL BREAK)
ODONNELL: I would like to, as they say in the Senate, revise and extend my remarks. On Monday, I asked you to consider how stupid the new Florida law is that repeals Disneys special tax status in the state. I would now like to revise and extend those remarks to make the point that it is much, much stupider than I thought.
By Monday, we realized that the repeal of Disney`s special tax and operating status in Florida meant that the tax bill for public services provided in and around Disney properties was going to fall on the two counties in Florida that surround Disney World. That meant that $163 million burden was suddenly going to be shifted from Disney and land on two neighboring counties where the tax collector in one county estimated that property taxes would have to be raised by 25 percent.
It is becoming clear tonight that that will probably never happen because the new profoundly stupid law will never go into effect, because pre-existing Florida law makes it impossible for Florida to repeal Disneys special status until all of the bond debt of Disneys Reedy Creek Improvement District has been paid off. And the earliest that could possibly happen is 2029.
The vindictive law, passed by the Republican Florida legislature and signed by Florida`s Republican governor who wants to be president, was passed for no reason other than the publicly admitted fact that the governor does not believe that anyone working at Disney should be allowed to publicly object to anything the Florida government does, including the new law championed by the governor, which prohibits any discussion of human sexuality by public school teachers through grade three.
The repeal of the existence of the Reedy Creek Improvement District, which is the entity that Disney runs in order to administer its properties in Florida, will not take place for another year. Thats the way the law is written. It doesnt take effect for another year.
In that year, Florida`s governor is now hoping that everyone forgets about this profoundly stupid law because the Florida legislature will surely at some point be forced to quietly repeal it if that can be done quietly.
And that`s not just because of it would dramatically increase property taxes around Disney World, it is because the law illegally violates a contractual promises made by the state of Florida in establishing the Reedy Creek Improvement District in 1967 when Disney began building Disney World.
In authorizing Reedy Creek to issue bonds in 1967 the Florida law says, the state of Florida pledges to the holders of any bonds issued by the district that it will not limit or alter the rights of the district until all such bonds, together with interest there on, are fully met and discharged.
Reedy Creek currently has $1 billion in bond debt. That $1 billion in bond debt would also become the burden of the neighboring counties, if the anti-Disney law went into effect.
But the law is unconstitutional both in the state of Florida and in the United States. Florida`s constitution and the United States constitution do not allow governments to enter into contracts that they then simply revoke by passing a new law. [Especially out of political retaliation.]
Florida attorney Jacob Schumer writes, “Florida simply cannot promise to prospective bond holders that it won`t interfere with REEDY CREEK, and then dissolve Reedy Creek. So, dissolving Reedy Creek is not just a $163 million tax problem for the neighboring counties, it is also a $1 billion bond debt problem for the neighboring counties.
And the man who signed his name to this symbolic and vindictive law repealing the existence of Reedy Creek did not know that when he signed it. He signed, in effect, the biggest tax increase ever visited upon any state without knowing that that`s what he was doing. Governing does not get stupider than that.
O`DONNELL: And everyone working for Republican Governor Ron DeSantis and every Republican working in the state legislature who supported this bill and their staffs, are all $1 billion stupider than I thought they were when this week began.
Jeff Brandes is a Republican state senator from St. Petersburg who opposed this legislative attack on Disney. He said, “This was shock and awe from the governor. Now, it`s time for the governor to be shocked and awed by his $1,163,000,000 tax increase on Florida taxpayers. He will always have it on his record that he wrote such a profoundly stupid tax law, signed it into law.
But the buffoons in the Florida legislature will, at some point next year, have to repeal it. The rank stupidity of it all, by all of them, should never be forgotten.
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