In the state capital of Florida, Disney employs 38 lobbyists. During each election cycle, the corporation contributes generously to candidates on all sides of the political spectrum in Florida. Its theme park megaresort near Orlando attracts over 50 million people each year, generating more than $5 billion in local and state tax money.
The bottom line is that Disney usually gets what it wants in Florida.
On Thursday, the Florida House voted to rescind Disney World's title as a special tax district, which the business had had for 55 years and allowed it to effectively self-govern its 25,000-acre theme park complex. The Reedy Creek Improvement District, a special zone in Florida, was repealed by the Florida Senate on Wednesday. Gov. Ron DeSantis, who paved the path to this result with a formal proclamation, will almost definitely sign the bill to make it legal. It would go into effect in June of the following year.
The Florida Republicans' hasty attempt to dissolve Reedy Creek has been widely interpreted as audacious vengeance after Disney, the state's largest private employer, halted political donations in the state and opposed a new education law dubbed "Don't Say Gay" by opponents. The law, among other things, bars discussion of sexual orientation and gender identity in Florida classrooms until third grade and restricts it for older kids.
Mr. DeSantis, a potential Republican presidential candidate in 2024, wrote in a fund-raising email to supporters on Wednesday, "If Disney wants to pick a fight, they chose the wrong guy." He went on to say, "I will not allow a woke corporation situated in California to control our state." "For far too long, Disney has gotten away with special agreements from the state of Florida."
"Disney felt they ruled Florida," Mr. DeSantis continued. They even attempted to assassinate me in order to further their woke agenda."
Disney has remained silent about the matter.
Experts estimate that the Reedy Creek Improvement District, which was established in 1967 to entice Disney to build a theme park 20 miles south of Orlando, saves the firm millions of dollars in fees and taxes each year.
Reedy Creek may also be able to help Disney with funding. Disney, for example, had Reedy Creek issue bonds to cover the expense of constructing a road junction near its Hollywood Studios park at Disney World a few years ago. (By contrast, when Disney needed municipal infrastructure in Anaheim, Calif., to build its California Adventure theme park in the 1990s, the business had to persuade Anaheim to issue bonds.)
The real value of the special district to Disney, however, is not cash; it is control.
Disney has significant control over the planning and approval process for projects on its enormous land, including road construction, thanks to Reedy Creek. Reedy Creek also charges Disney taxes to cover the costs of the resort's own fire and medical response battalions, among other things. Disney World even uses Reedy Creek to generate some of its own electricity.
"The impact on Disney is more symbolic than real money," a Wells Fargo analyst, Steven Cahall, wrote in an email, "though political theatre is never good for market sentiment."
On Thursday, Disney's stock price dropped 2.3 percent, ending the day down.
Hundreds of such special tax districts would be preserved throughout Florida. The Villages, a large senior-living complex northwest of Orlando, is covered in one. Another includes the Daytona International Speedway and its environs.
The designation has helped Disney expand the resort, which includes six theme parks, an expansive outdoor shopping mall, a 220-acre basketball, soccer, volleyball, lacrosse, baseball, and competitive cheer complex, and 18 Disney-owned hotels with a total capacity of 24,000 rooms. The bus fleet in Disney World is comparable to that of St. Louis.
According to a Disney filing, Disney World paid more over $780 million in state and local taxes in 2021.
Disney World is located in two counties, Orange and Osceola, both of which would be obligated by state law to step in and offer a version of the services currently provided by Reedy Creek, almost definitely resulting in higher taxes for residents. According to Orange County's tax collector, Scott Randolph, citizens' property taxes might rise by as much as 20%. According to public statistics, Reedy Creek has a $355 million annual budget. It owes $977 million in debt to the counties, which would be transferred to them as well.
If the district is abolished, Disney may apply to re-establish it. Instead, the corporation could scale back its growth plans for the resort.
Mr. DeSantis and Disney had already clashed on pandemic issues, including a proposed vaccine mandate for employees. Disney, on the other hand, benefited from his strong attempt to reopen Florida for business in 2020, despite an increase in coronavirus illnesses. Disney World reopened in July 2020 after closing in March. (By contrast, due to California's stricter pandemic restrictions, the firm was unable to reopen Disneyland until late April.)
The company's spat with the state of Florida is the latest illustration of how speaking up on social and political issues can put businesses at odds with legislators. Georgia politicians threatened to increase Delta Air Lines' taxes last year after the airline came out against the state's restrictive voting laws. Texas lawmakers recently announced that Citigroup would be barred from underwriting municipal bonds in the state unless the bank repealed its policy of paying for workers to go out of state for abortions, which are illegal in the state.
Mr. DeSantis and Disney's feud began on March 9, when the corporation, under intense pressure from its workers, spoke out against the Parents Rights in Education Act, also known as the "Don't Say Gay" bill.
A Human Rights Campaign letter opposing the law has previously been signed by over 150 firms, including Marriott and American Airlines. Disney, on the other hand, has avoided taking a public stance, with CEO Bob Chapek stating in a statement to staff on March 7 that he did not want the firm to become "a political football."
Mr. Chapek responded two days later, after mounting pressure on Disney to reject the law. He also stated that he had called Mr. DeSantis "to voice our dismay and fear that the proposal could be utilised to unfairly target gay, lesbian, nonbinary, and transgender children and families if it becomes law."
Mr. Chapek stated, "The governor heard our concerns and agreed to meet with me and L.G.B.T.Q.+ members of our senior team in Florida to explore how to address them."
Mr. DeSantis was enraged, prompting a tit-for-tat between his press secretary and a Disney spokesman. On March 28, Mr. DeSantis signed the bill into law, reinforcing Disney's criticism. "As a corporation, our aim is for this law to be repealed by the legislature or overturned in the courts," Disney said at the time. "We remain committed to helping the national and state organisations working to achieve that."
The state of Florida then threatened to withdraw Disney World's special tax district.
The Florida Legislature met in extraordinary session this week to discuss congressional redistricting. On Tuesday, Mr. DeSantis signed a proclamation allowing the Republican-controlled legislature to consider the repeal of special districts founded before 1968. With the exception of Disney, almost all were established up after that date.
