Experts: Disney unlikely to leave; tax burden of millions would shift
Counties calculating the financial fallout
Gov. Ron Desantis and the Florida Legislature’s actions to start the clock on dissolving a special self-governance district created for The Walt Disney Co. in 1967 could have dramatic impacts for two Orlando-area counties and their taxpayers.
The 38.5-square-mile Reedy Creek Improvement District gave Disney significant control of its property surrounding its Walt Disney World complex in Orange and Osceola counties. Reedy Creek, for example, oversees public safety for Disney, as well as upkeep of roads and other infrastructure including water treatment and building inspections. Dissolving Reedy Creek is equivalent to dissolving a city.
h Orange County Tax Collector Scott Randolph tweeted that if Reedy Creek is gone, so is the $105 million Disney collects from itself annually to operate those services. Randolph predicted it could mean a 20% to 25% increase in property taxes for Orange County residents.
h Neighboring Osceola County said it is “uncertain” about its future financial responsibilities and is studying the issue.
h The counties also likely would have to assume the debt obligations now held by Reedy Creek. Randolph said Reedy Creek has $53 million a year in debt obligations.
Why did Desantis disband the Disney district?
Desantis and members of the Republican-controlled Florida Legislature targeted Disney for the company’s opposition to the “Parental Rights in Education Act” that legislators approved and Desantis signed into law.
Among other provisions, the law limits instruction about gender identity and sexual orientation in grades K-3. But critics of the measure – who term it the “Don’t Say Gay” bill – contend it also will negatively affect members of the LGBTQ community.
The two-page bill doesn’t specifically mention Disney or Reedy Creek. But it calls for dissolving independent special districts established before Nov. 5, 1968, and “not reestablished, re-ratified or otherwise reconstituted by a special act or general law” after then.
It’s clear the bill was aimed at Disney. In a Facebook post announcing the introduction of the bill, Florida Rep. Randy Fine, R-palm Bay, said: “Disney is a guest in the state of Florida. Today, we remind them of that fact. Governor Desantis and I just announced that we are expanding the Special Session to hold Disney accountable.”
Disney had vowed to work to repeal the Parental Rights in Education Act and announced it was stopping all political contributions in Florida.
Florida Rep. Anna Eskamani, D-orlando, called the law to repeal Disney’s special district “petty, punitive politics at its worst. They’re trying to cancel Disney and bully them into submission. It’s
undemocratic.”
Because of the bill’s speedy introduction, passage and signing into law, “it was also done in a way where the public didn’t get to weigh in or for the ramifications (of the bill) to be thoroughly studied,” she said. “Special sessions are supposed to be about urgent issues. This isn’t one of them.”
Eskamani called it “a telltale sign of one-party rule, drunk on power. This sends an unsettling message to anyone who challenges the governor.”
What kind of money are we talking about?
The Reedy Creek Improvement District collects about $105 million a year to operate services inside Reedy Creek, according to Randolph. So Disney, in effect, taxes itself for such things as operating its own power plant, maintaining roads and providing fire protection.
“This is on top of other taxing authorities it sets in,” Randolph said as part of a series of tweets he posted on this issue.
“So Disney pays the same Orange County, local and state school taxes, etc., as all other properties inside Orange County. If Reedy Creek goes away, the $105 million it collects to operate services goes away. 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.”
How big a deal is Disney to Central Florida?
Very big. It has four theme parks, two water parks, various hotels, restaurants and shops in the Orlando area.
In addition, the two largest Disney Cruise Line ships sail out of Port Canaveral in Brevard County, which borders Orange and Osceola counties. Another
Disney cruise ship also currently sails from Miami.
Disney employs more than 75,000 and is the largest employer at a single location in Florida.
“What I can tell you is, for the 50-plus years that Disney has been a part of this community, they have been great community partners,” Orange County Mayor Jerry Demings said, adding he believes Disney has been “an instrumental part” of spurring growth, “not only for our community but for the entire state of Florida. When you think about visiting Florida, you can’t help but think about visiting Disney and other theme parks as well.”
Could Disney decide to scale back its Orlando-area operations?
University of Central Florida economist Sean Snaith doesn’t think that would happen.
Snaith said Disney is too heavily invested in its Orlando-area theme parks to pull out of Florida.
“However this Reedy Creek thing works out, it’s not like we’re talking about a call center where a company could simply pull out,” said Snaith, director of the university’s Institute for Economic Forecasting.
Snaith noted that Disney has no room to expand in Anaheim, California, where Disneyland is located, whereas it has plenty of room for further expansion
in Florida, both where Disney World is located, as well as the nearly 60 acres it bought last year in Lake Nona for its planned Parks, Entertainment & Products Division.
“The future growth for the company in this country is Disney World,” Snaith said.
James Clark, a political analyst and senior lecturer with the University of Central Florida’s history department, said he doesn’t think “Disney will capitulate, but they may use their army of 38 lobbyists in Florida to quietly work out a compromise, which is probably already underway. But they may also go to court to fight this. In the long run, I think they may work with Orange and Osceola counties, as well as the state, to try to soothe the waters.”
Disney did not respond to a request for comment.
What are the political ramifications in the Disney fight?
Susan Macmanus, a political science professor emeritus at the University of South Florida, said “there’s both an economic and political side to this, and when the two collide, usually the political side wins. Right now, both Democrats and Republicans are finding political value in attacking corporations. Democrats want more regulations and accuse corporations of making too much profit. On the Republican side, you’ve got the anti-woke fight. A lot of people are scratching their heads and wondering: Why now? Of course, it’s happening now because it’s an election year.”
Latest-available voter registration figures show that there are roughly an equal number of Republican and Democratic registered voters in Florida.
But Orange and Osceola counties both lean Democratic. In Orange, 42.3% of voters are registered Democrats and 25.0% are Republicans. Similarly, in Osceola, 40.2% of voters are Democrats and 23.2% are Republicans.
Dave Berman is business editor at Florida Today.