With no advance notice, Gov. Ron DeSantis demanded that lawmakers punish Disney for its tepid criticism of a hateful bill aimed at banning discussion of sexual orientation or gender identity in Florida classrooms (also, for Disney’s threat to cut off campaign contributions).
And as the dust settles, many suspect that Disney’s “punishment” could let the company pocket tens of millions of dollars each year and shift a billion-dollar debt onto the shoulders of local taxpayers.
Lawmakers passed a bill (SB 4C) that abolishes a key component of Disney’s successful 50-year run in Florida.
Disney, as it turns out, has its own government. In fact, it has three: Two cities — Bay Lake and Lake Buena Vista — and the Reedy Creek Improvement District, which wraps around Disney’s iconic theme parks and resorts along with thousands of vacant acres in Orange and Osceola counties.
There’s a lot to consider. Reedy Creek issues Disney’s permits, operates its utilities including water, sewer and electric; and levies a hefty property tax that pays for the services Disney needs. But who is Disney taking that money from?
As it turns out: Disney. Disney and its affiliates contribute 87% of the district’s tax revenue.
For 55 years, the Reedy Creek district has been operating as intended. That built-for-Disney government is what DeSantis ordered his pet legislators to destroy. Under HB 4C, the Reedy Creek Improvement District will go bibbity-bobbity-boom in June 2023. But after poking around, this bill doesn’t look nearly as disastrous for Disney as DeSantis intended.
Start with that $164 million in property taxes, which funds most of the district’s $178 million operating budget. If the district goes away, so does its taxing authority. Who picks up the tab?
That’s really not clear. Rep. Randy Fine, R-Palm Bay, theorized that most of the district’s responsibilities and assets might, maybe, possibly, trickle down to the cities of Bay Lake and Lake Buena Vista. Which are still controlled by Disney, and have taxing authority.
But that leaves thousands of acres outside those two cities’ limits. In that case, a portion of the burden will fall on Osceola County, but most of it will land on Orange County. Assuming those costs could be disastrous, County Mayor Jerry Demings told the Sentinel.
Then there’s the Reedy Creek district’s debt, which we estimate at $977 million, with about $100 million more in liabilities. That’s a lot. Who’s responsible for paying it? Fine guessed the counties might be responsible — but bond documents suggest the state itself could be held responsible for triggering default.
Lawmakers dangled the possibility of re-authorizing the district in 2023. The company has options: Greatly expanding the boundaries of the cities it controls, or striking a local deal with Orange and Osceola counties. Either option would be more tamper-resistant to hot-headed lawmakers.
