Florida Gov. Ron DeSantis on Friday signed into law a bill revoking the Walt Disney Company’s special district status in the state, just days after the legislation was first introduced on Tuesday.
The bill, which would see the Reedy Creek Improvement District dissolved, passed the state Senate on Wednesday with a vote of 23-16 and the state’s House of Representatives on Thursday by a vote of 70-38.
Disney has up to this point declined to comment on the legislation, but the dispute is likely to end up in court.
For more than five decades, Disney has been able to make additions to its resort area, including new theme parks, hotels and other tourism experiences, without interference from local counties. That’s set to change in June 2023 now that DeSantis has signed the bill into law.
Widely seen as a contender for the 2024 GOP presidential nomination, DeSantis is locked in a bitter and public feud with the entertainment giant over the company’s denouncement of Florida’s HB 1557 law last month. While proponents of the bill have denied that it is a retaliatory act against Disney, critics see it as retribution for publicly quarreling with the governor.
Reedy Creek was created in 1967 by the Florida legislature so Disney could develop the infrastructure for Walt Disney World at no cost to Florida taxpayers. Disney established and continues to maintain more than 130 miles of roadways and 67 miles of waterways as well as government services such as fire protection, emergency services, water, utilities and sewage.
Tax experts and legislators say eliminating the district could have unintended consequences for county taxpayers. Disney’s special tax district status allows the company to levy an additional tax on itself to pay for municipal services, something that other counties cannot do. That tax currently amounts to $105 million per year, said Orange County tax collector Scott Randolph. Reedy Creek also receives additional revenue of nearly $60 million from Disney to pay its bond debt.
Sunsetting Reedy Creek means that local counties will begin paying for those services without that special status in place. Taxpayers will likely be left to foot the bill for potholes and emergency services.
The counties would also absorb Reedy Creek’s debt. The district historically operates at a loss of around $5 million to $10 million each year, according to its financial reports. But since Disney can subsidize its own operations with theme park revenue, that debt doesn’t have much impact on its bottom line.
According to lawmakers, there’s around $1 billion in debt on the balance sheet that taxpayers would become responsible for should the special district get absorbed, leading to higher taxes.
And salvaging those budgets won’t be easy. State law prohibits counties from raising sales taxes or impact fees to cover costs, and they must tax all areas of the county equally. So, whatever they enact will apply to everyone.
Randolph said the county will likely have to raise property taxes by 20% to 25% to make up the difference.
