Last week, Florida Governor Ron DeSantis signed into law a bill dissolving Reedy Creek, the special self-governing district that houses Disney World. The legislation was very clearly designed to serve as authoritarian retaliation against Disney’s (eventual, relatively tepid) opposition to DeSantis’ anti-LGBTQ+ passion project, the so-called “Don’t Say Gay” law.
Except it looks like the Florida legislature can’t actually dissolve Reedy Creek—at least, not without paying off the district’s gigantic bond debt.
As Florida legislators were rushing through passage of a bill to repeal the special district that governs Walt Disney World last week, they failed to notice an obscure provision in state law that says the state could not do what legislators were doing — unless the district’s bond debt was paid off.
Disney, however, noticed and quietly sent a note to its investors to show that it was confident the Legislature’s attempt to dissolve the special taxing district operating the 39-square mile parcel it owned in two counties 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.
Basically, the agreement made between Disney and Florida back in 1967 said that the state wouldn’t “not limit or alter the rights of the District” until all bonds are paid off. That leaves about a billion dollars in debt that, under this agreement, would have to be passed off to taxpayers in neighboring counties.
DeSantis said at a press conference this week that “under no circumstances will Disney not pay its fair share of taxes,” and “under no circumstances will Disney not pay its debts.”
There’s more than a full year before Reedy Creek has a while to make some changes (and Florida has time to reverse course on this clearly poorly planned out legislation) but for now, DeSantis doesn’t get to just declare things like that and make them true.
Where this debt came from and where it goes now
Bloomberg Tax explains that “Reedy Creek, like other special districts, can borrow money by issuing bonds, which can then be purchased by investors looking for fixed payments.”
The outlet continues: “Reedy Creek is authorized to issue a few different kinds of bonds, but the most important ones are those that promise to pay from the property taxes collected by the district and those that pay from utility system revenue.”
So Reedy Creek pays most of its bond debt via property taxes, and despite the perception DeSantis and other Florida lawmakers may have (and definitely want to project), Disney doesn’t pay less in taxes, it actually pays more. The tax rate in Reedy Creek is way higher than that of neighboring counties—it’s just that that money goes back into itself. But if the state breaks its agreement with the district, regular taxpayers will be on the hook.
As Orange County’s tax collector told the Herald, “Disney has more power now to determine its tax bill than it did a week ago. … That’s what’s crazy to me. They want to punish Disney, but this is the furthest thing from that. You literally put them in the driver’s seat of how much they want to pay.”
Basically, DeSantis wanted to make Disney pay for criticizing him and he is doing a comically terrible job.
(via The Miami Herald, image: Octavio Jones/Getty Images)
