Florida Governor Ron DeSantis said on Monday that control of Walt Disney Co.’s special government district would likely go to the state and not local governments if it’s dissolved next year.
“After seeing them threatening to raise taxes on their citizens, we are not going to be in a situation where we’re just going to be giving them, locally control,” he said during a press briefing when asked about the possibility of property taxes rising as a result. “More likely that the state will simply assume control and make sure that we’re able to impose the law and make sure we’re collecting the taxes.”
DeSantis signed legislation last month that will dissolve in 2023 the Reedy Creek district, where Disney’s Florida amusement parks and hotels are based, unless it’s explicitly reauthorized by the state’s legislature. The new law emerged after a month-long feud between the Republican governor and Disney in which the entertainment giant criticized a law DeSantis backed that limits school instruction about gender identity and sexual orientation.
DeSantis said that he is working on proposals and will collaborate with the state legislature. While he didn’t provide any concrete details, he said that Disney would be responsible for paying back the nearly $1 billion in municipal bonds issued by the special district.
“That debt will not end up going to any of these local governments,” he said. “It’s not going to go to the state government, either. It’s going to absolutely be dealt with, with the taxpayers who are currently in that district.”
State Takeover
The Florida governor made the comments amid ongoing concern by some residents that dissolving Disney’s special district could lead to tax increases if municipalities have to take on the burden of the company’s debt and provide additional services.
Reedy Creek is governed by a five-member board of supervisors, elected by local landowners. A state takeover could put control of the district, which provides water, sewer, power and other services to Disney World, in the hands of gubernatorial appointees. The district collected revenue of $306 million last year from taxes and user fees, according to its annual report.
While some of other special districts in the state that were affected by the legislation signed last month may be amended or re-authorized, DeSantis said Disney would not maintain control of the government.
“Obviously with Reedy Creek, the path forward is Disney will not control its own government in the state of Florida,” he said. “They will pay their fair share of taxes, and they will be responsible for paying the debts. At the end of the day, all we’re doing is putting them on a level playing field with all the other companies in Florida, making sure there’s no special privileges, no special deals, but that debt will be honored.”
Shares Down
DeSantis said that local taxes would not rise as a result, as the local governments will not see any additional liabilities.
“We’re working on some proposals,” DeSantis said. “I think we’ve got it pretty much what we want to do, but I’m going to work with the legislative leaders for, who are going to come in after the election to make sure that we’re all in agreement.”
Disney shares fell 1.2% to $106.04 at 1:47 p.m., extending its decline this year to 31.6%. Still, Disney reported last week that subscribers to its Disney+ streaming service beat Wall Street estimates and that the company more than doubled of its theme park revenue thanks to surging attendance. The results suggest that DeSantis’ criticism of the company is not discouraging average Americans from using the company’s products.
Bloomberg Politics
By Nathan Crooks
May 16, 2022
— With assistance by Christopher Palmeri