The political fallout surrounding Walt Disney World in Florida has become as notorious as Mickey Mouse himself.
Florida Governor Ron DeSantis last week finalized his retaliation against The Walt Disney Company by signing a bill that looks set to dissolve the Lake Buena Vista Resort’s special treatment in the state.
Up to this point, Disney has remained silent. Now, though, we have Disney’s first public statement since lawmakers unleashed their fury over the company’s opposition to the “Parental Rights in Education” law.
Amid a political boycott of The Walt Disney Company and its CEO Bob Chapek due to an aggressive stance against a recent education bill, the Florida Governor has sworn to remove the Walt Disney World’s Reedy Creek Improvement District.
Since 1967, the Walt Disney World Resort has been able to reside in Florida unregulated, basically acting as its own “government”. Reedy Creek allows Disney to act with the same authority as a county government. Local taxpayers – residents of Orange County and Osceola County – do not have to pay for building or maintaining Disney’s essential services.
After over 50 years, it looks like this is all ending due to Republican retaliation for Disney’s stance on Florida’s Parental Rights in Education Bill passed in February. But as Florida legislators were rushing to get the repeal bill passed, it seems they failed to notice a provision in state law that says Florida can not dissolve Reedy Creek unless the district’s bond debt was paid off first. Disney quietly noticed this provision and has now supplied its first statement on the matter.
In a statement posted on the Municipal Securities Rulemaking Board on April 21 by the Reedy Creek Improvement District, Disney quotes the statute which says that the “State of Florida pledges…it will not limit or alter the rights of the District…until all such bonds together with interest thereon…are fully met and discharged.”
Disney sent a note to its investors confident that the Legislature’s attempt to dissolve the Walt Disney World special taxing district violated the “pledge” the state made when it enacted the district in 1967, and therefore was not legal. The result, Disney told its investors, is that it would continue to go about business as usual:
“In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties.’’
Essentially, Florida pledged a contractual obligation not to interfere with the Reedy Creek district until the bond debt is paid off.
Questions have already been asked about whether or not the procedures used by the state’s Legislature to pass this bill were legal. According to Florida state statute 189.072, a majority of the Reedy Creek residents would have to vote in favor of dissolving the district.
Furthermore, lawyers specializing in constitutional law believe that Disney would win a First Amendment lawsuit. Dissolving Reedy Creek and Walt Disney World’s special treatment has clearly been explained by Republicans as retaliation against Disney’s opinion on the “Don’t Say Gay” bill.
The law passed by the Republican Legislature and signed by Florida governor Ron DeSantis, either violates the contract clause of the Florida Constitution or is incomplete, according to the Miami Herald.
The move could not only have huge tax implications for Disney World, but also for residents of Orange County and Osceola County, who may have to assume Disney’s liabilities of anywhere between $1 billion and $2 billion if the Reedy Creek Improvement District is dissolved.
The Walt Disney World’s district can currently borrow money by issuing bonds to pay for services at Magic Kingdom, EPCOT, Disney’s Hollywood Studios, and Disney’s Animal Kingdom theme parks. While Disney must also pay property taxes to Orange County and Osceola County, Florida also allows the Reedy Creek Improvement District to tax itself.
According to the Miami Herald, the current tax rate for Reedy Creek is three times higher than the maximum amount allowed by cities and counties. Many Republicans believe that Disney is getting special treatment and a tax break for its Reedy Creek theme parks, but it is actually the opposite. In fact, Universal Studios Orlando and SeaWorld Resorts, which operate under dependent taxing districts, have more tax advantages than Disney.
By dissolving Reedy Creek, Republicans in Florida under DeSantis are essentially breaking the pledge made in the district’s original contract. Disney’s first public statement on the matter shows that it is not phased by DeSantis’ move, telling investors that Florida can’t dissolve its special district without paying off its debt.
Disney initially shied away from making a public statement regarding Florida’s new bill, dubbed the “Don’t Say Gay” bill, which targets the LGBTQ+ community and restricts conversations about gender and identities in schools. Disney’s statement against the bill caused a feud with Ron DeSantis, who set about dissolving Walt Disney World’s special bubble in Florida.
The Reedy Creek District covers 4 theme parks (Magic Kingdom, EPCOT, Disney’s Hollywood Studios, and Disney’s Animal Kingdom), 2 water parks (Disney’s Typhoon Lagoon and Blizzard Beach), Disney Springs, 175 lane miles of roadway, 67 miles of waterway, the cities of Bay Lake and Lake Buena Vista, water, electrical, and waste management facilities, as well as over 40,000 hotel rooms and 100s of restaurants and retail stores.
So far, we’ve heard no comment from Disney CEO Bob Chapek on the matter, but stay tuned to Disney Tips for all updates on this developing story.