Days after it was introduced to Florida legislators, the state’s Republican Governor Ron DeSantis has signed a measure to dissolve the Walt Disney Company’s decades-old governing agreement with the state that has allowed the company to manage and tax its sprawling theme park and resort properties.
The move comes after Florida Republicans and the DeSantis administration lashed out at the corporate giant – the state’s largest employer and a massive economic engine – for its opposition to what opponents have called the “Don’t Say Gay” law, which critics argue will restrict classroom lessons on LGBT+ events and history and limit how LGBT+ students, staff and their families are represented in schools.
Dissolving the Reedy Creek Improvement District upends years of cozy relationships between the company and Republican legislators and could create massive tax and financial headaches for residents poised to absorb Disney’s bond debt.
County officials and legislators will work to untangle what happens next before the district’s dissolve takes effect in 2023.
Following weeks of pressure among LGBT+ advocates and Disney employees urging the company to publicly lobby against the state’s GOP-backed Parental Rights in Education Act, Disney CEO Bob Chapek announced last month that the company would oppose the bill and suspend its political donations in the state.
Campaign finance reports reviewed by The Independent show that Disney entities donated tens of thousands of dollars to legislators who supported the bill, including at least $50,000 to the governor’s 2022 re-elelection campaign.
The measure, which Governor DeSantis signed into law on 28 March, prohibits instruction of “sexual orientation or gender identity” from kindergarten through the third grade and any such discussion “that is not age-appropriate or developmentally appropriate for students” in other grades. Similar measures have been proposed in more than a dozen other states.
“Our goal as a company is for this law to be repealed by the legislature or struck down by the courts, and we remain committed to supporting the national and state organisations working to achieve that,” Disney said in a statement after the governor signed the bill last month.
The Reedy Creek Improvement District, implemented in 1967, operates as the municipal governing structure for Disney properties, spanning 39 square miles and land across Orange and Osceola counties as its own company town.
Through the district, Disney effectively controls its land use and zoning rules and operates its own public services, including water, sanitation, emergency services and infrastructure maintenance, by levying taxes on itself through the district board.
Democratic legislators in Florida have warned that without the district, taxpayers in neighbouring counties could be responsible for the services that Disney requires, and residents could inherit tens of millions of dollars in Disney’s bond debt through potentially massive tax bills, though the details are murky.
“The moment that Reedy Creek doesn’t exist is the moment that that those taxes don’t exist,” Orange County tax collector Scott Randolph said. “Orange County can’t just slap a new taxing district onto that area and recoup the money that was lost.”
The dissolve of the district instead amounts to a roughly $163m annual tax break for Disney, according to Mr Randolph.
Without the district, Disney will likely have to petition through county- and state-level governments for the kinds of project requests it would typically make through the district.
A statement from a spokesperson for Osceola County to The Independent said that government officials will study the bill “to understand the impacts in preparation for this going into effect, including evaluating any shifts in cost to Osceola as a result.”
“As Disney and Reedy Creek have been self-contained, we are uncertain of what fiscal responsibilities will be encumbered after June 2023,” according to the statement. “Over the many years, Disney has been a strong community partner and we expect that relationship to continue as we work together for a transition plan.”
Orange County Mayor Jerry Demings said if the county were to “take over the first response and public safety components for Reedy Creek with no new revenue, that would be catastrophic for our budget in Orange County.”
“It would put an undue burden on the rest of the taxpayers in Orange County, to fill that gap,” he said. “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.”
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