Will Disney actually lose its special tax status and get absorbed into the surrounding counties? Well, it depends a lot on who you ask.
While Florida’s Republican-led state legislature just passed a bill stripping Walt Disney World (DIS) – Get Walt Disney Company Report of those rights on April 21, actually implementing the change is much more complicated than passing it.
The bill was introduced earlier this week by Florida Governor Ron DeSantis after a months-long feud over an earlier law banning the discussion of gender identity and sexual orientation in Florida’s public schools.
What Did Florida’s Republicans Do To Disney?
In March, Disney CEO Bob Chapek publicly criticized what opponents call the “Don’t Say Gay” bill amid increasing pressure from LGBTQ+ supporters and allies.
As Disney sits on a 39-square-mile plot of Central Florida land that since 1967 has been able to operate as its own government, DeSantis retaliated by pushing forward a bill that would strip it of such rights.
A 23-16 vote of approval passed during a special vote held by the state legislature on April 21.
The bill requires DeSantis’ signature to become law and would, barring a change of heart on his part or difficulties with implementation, take effect on June 1, 2023.
The implications of such a change cannot be underestimated.
What is currently Reedy Creek Improvement District would get absorbed into the nearby Orange and Osceola counties.
It would also require Disney, which is currently responsible for its own construction, power and road maintenance, to seek the state’s permission to build everything from new rides to hotels.
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I Have To Pay How Much In Disney Taxes?
While Disney would be required to pay taxes to the local jurisdictions, the counties would in turn have to absorb Reedy Creek’s up to $2 billion in debt and pay for construction that would ultimately benefit Disney.
Even though the change would also absorb Reedy Creek’s assets in addition to its liabilities, the high debt and expenses needed to keep Disney running would likely result in a higher tax bill for the average Orange and Osceola resident.
“The reason special districts were created was so taxpayers who don’t benefit from the services of the special district aren’t required to pay for it through taxes,” Politico’s Stephany Matat wrote after the bill passed on Thursday.
Disney has a market cap of $222 billion.
Image source: Shutterstock.
Will This Even Happen?
Another important point is that, according to Florida’s statue chapter 189.072, a state legislature vote is not enough to dissolve a special jurisdiction.
Such a change would also require a majority of residents or landowners in the district to vote in favor.
The majority of Reedy Creek residents are, in fact, Disney employees who are not likely to vote against their employer’s interests.
What is, however, very likely is months of back-and-forth between Disney and Florida’s Republicans as the latter try to look for loopholes to implement the bill, but ultimately run into mountains of red tape and financial considerations.
But perhaps the slew of articles about the vote has been the goal all along.
“Going after Disney by passing a law that purports to dissolve Reedy Creek without actually doing it allows DeSantis to get his pretend victory over Disney while not actually harming Disney at all,” Robert Niles, the editor of Theme Park Insider, wrote in an April 21 opinion piece.
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