Florida Gov. Ron DeSantis is following through with threats against Disney World’s self-governing powers.
DeSantis announced this morning that he would ask Florida lawmakers to eliminate the Reedy Creek Improvement District during a special Legislative session that started today.
©The Florida Channel | Courtesy of WTVT
The announcement escalates the feud between DeSantis and Disney, which until now has largely been a war of words over actions by Disney that DeSantis deems “woke.” The feud began when Disney CEO Bob Chapek spoke out against the Florida Parental Rights in Education Act, which critics call the “Don’t Say Gay Bill.”
“The threat to the Reedy Creek Improvement District is real,” Dr. James Clark, a political analyst and senior lecturer in the University of Central Florida Department of History, said in an interview with Disney Food Blog. “Governor DeSantis has found a great culture war issue in bashing Disney and I do not see him stopping the bashing as long as it drives donations and support.”
Repeal Would Affect Orange, Osceola Counties’ Bottom Line
The Reedy Creek Improvement District, created by the Reedy Creek Improvement Act in 1967, was requested by Walt Disney himself during the planning and building of Walt Disney World.
It gives Walt Disney World the powers to create its own municipalities, which in turn allows the company to establish its own building and zoning regulations and run its own emergency services like a fire department. Disney could even build its own airport or nuclear power plant – provided it met all state and federal regulations, Clark said.
Reedy Creek Fire Department ©Reedy Creek
Dr. Susan MacManus, a political analyst and University of South Florida Distinguished Professor Emerita of Political Science, said she finds the threat against the Reedy Creek Improvement District unusual because of all it would take to unravel it.
If the RCID were eliminated, control of the 40+ square miles owned by Walt Disney World would go back to the two counties it straddles – Osceola and Orange. They would have to provide the fire protection, emergency medical services, permitting services and other governance that Disney now does for itself.
And they would be doing it without more tax money.
The Walt Disney World main gate
“The special district does not exempt Disney from paying property taxes,” Clark said. Disney is Central Florida’s largest taxpayer, paying nearly $300 million per year in property taxes to Orange and Osceola counties, as well as about $250 million in other state taxes.
So, if those counties had to assume many of the roles the Reedy Creek Improvement District now performs, they would be doing it without any real expanded income, save some potential permitting and other construction fees. The counties could create a special fire protection taxing district to re-coup some of the money needed to replace the 200-employee Reedy Creek Fire Department, which provides 911 emergency services, fire protection, and emergency medical services. But other services counties are expected to provide would fall back to both of the counties to fund, and that might lead to an increase in property taxes for local residents, Clark said.
Road construction at Walt Disney World
Orange County may even stand to lose some income, Clark said, as the cities contained in the Reedy Creek Improvement District – Lake Buena Vista and the City of Bay Lake – contract with the Orange County Sheriff’s Department for some police protection. The two cities budgeted a combined $22.8 million for this police protection in fiscal year 2022.
“I’m not sure they (Orange and Osceola counties) want to take over Disney World,” Clark said. “It’s kind of a bottomless pit in terms of how much it would cost them – it’s the great unknown.”
Construction on the new Tron attraction continues at the Magic Kingdom,
The establishment of the district has meant that Disney has built – and funded without tax dollars – its own roads and infrastructure as its resort twice the size of Manhattan has developed over the past five decades. Clark said even if Orange and Osceola counties were opposed to the change, they might have problems getting their voices heard in the state capital, since their representatives are Democrats.
MacManus – who lived in Orlando when the Reedy Creek Improvement District was created – agreed. “It just doesn’t look like the Dems will make a lot of inroads on anything this session,” she said.
“I never thought I’d see the day that Florida’s largest employer, @WaltDisneyWorld, would be under attack by the Florida Legislature. Disney is larger than most cities, complete w fire stations, police officers, hospitals, & now adding affordable housing,” Rep. Allison Tant (D.-Tallahassee) said Monday in a tweet.
Eliminating Disney’s Improvement District Would Be A Painful Blow
Despite the fact that eliminating Reedy Creek may hurt the counties Walt Disney World is located in, Clark says this possibility is also “a disaster for Disney.”
Disney’s Animal Kingdom
There would be significant impacts to the speed and cost of new construction for Disney going forward, since it would have to look to the counties for zoning changes and permitting, and pay impact fees that it does not pay now.
Disney has a 55-year history of managing its own turf, and the potential impacts to its bottom line if it could no longer do that remain to be seen.
Fantasyland contruction
Both MacManus and Clark indicated that bringing the Disney issue into this Legislative Special Session is surprising because of the “bigger” issues at stake for Florida residents.
State Rep. Randy Fine (R.-Melbourne Beach) is a sponsor of the bill, HB3C, which eliminates the Reedy Creek Improvement District. “Disney is a guest in Florida,” he said Monday in a tweet. “Today, we remind them.”
“There are so many more pressing things,” MacManus said, pointing to the skyrocketing property insurance rates in Florida, as well as condo safety legislation prompted by the 2021 Surfside Condominium Collapse. “There’s one thing about Florida, though – you never say never.”
Disney’s Hollywood Studios
While it’s not as if the Walt Disney Company could pick up and move a 27,000-acre resort to a different state because of political woes, there are other aspects of Disney’s business it could choose to engage in elsewhere.
A project that will relocate up to 2,000 high-paid Disney Parks, Experience and Products professionals from California to a campus in Orlando’s Lake Nona area has been underway since June 2021. The moves are expected to be completed by the end of 2022.
But California Gov. Gavin Newsom has suggested that with the political climate in Florida, Disney may want to put the brakes on the move. “Disney, the door is open to bring those jobs back to California – the state that actually represents the values of your workers,” Newsom said in a tweet.
Other Battles on the Horizon
Clark brings up another way state Legislative action could “hurt” Disney: loosening the way tourism taxes can be spent.
Orlando International Airport crowds
“Disney draws tens of millions of people to Florida every year, and Central Florida is dependent on those tourists to pay the bills,” Clark said. “They buy gasoline and pay gas taxes. They pay resort taxes. And that’s another avenue where the Legislature could take a stab at Disney – by re-allocating where the resort taxes can be spent.”
Orange County budgeted an expected $175 million in Tourist Development Taxes (aka the resort tax) for Fiscal Year 2021-22. A big chunk of that comes from a 6 percent tax that every Disney guest pays on resort stays. And what is this money used for? To promote the tourist attractions in Orlando – including Walt Disney World. Disney guests actually pay a tax that helps Disney World draw more Disney guests.
EPCOT
Clark points out that in other areas of the state, the Legislature has permitted counties to use less money for promotion and more money for other expenses, including things like building new infrastructure. But not in Orange or Osceola counties … yet.
A bill proposed by state Rep. Anna Eskamani (D.-Orlando) in November 2021 sought to expand Orange County’s ability to spend resort tax money on road construction, after county leaders had to find other sources to fund road construction needed for Universal’s new Epic Universe theme park.
©Universal | Epic Universe Concept Art
That bill stalled in the Legislature, largely because of political lobbying by Disney and other theme parks. But Clark said he expects the issue to be brought up again.
Disney and Florida Politics: Inextricably Linked?
Speaking of those Disney lobbyists, they are a fixture in Tallahassee, where Clark says the corporation employs more than 30 political pros to lobby Legislators on all kinds of issues including, recently, drumming up support for a bill that would have prohibited hotels and motels in Florida from renting rooms at hourly rates.
Another issue Disney has spent money lobbying against in Tallahassee? Gambling expansion in Florida. Disney and the Seminole Tribe of Florida together spent more than $26 million in 2018 to put the control of gambling expansion in the hands of voters.
Disney CEO Bob Chapek in Disney World on its 50th Anniversary
Right now, Clark envisions that team of lobbyists will be turned loose to fight the elimination of the Reedy Creek Improvement District, while Disney lawyers are turning over stones looking for legal arguments and preparing to challenge any potential Legislative action.
This all makes for an unusual chapter in the state’s history, as Disney and Florida have shared an almost symbiotic relationship for so long – one that has included many political donations.
“This has been a wonderful relationship – Disney helping the Legislators, and the Legislators helping Disney,” Clark said. Not to mention that Disney is the state’s largest single-site employer and the largest driver of tourism, the income from which has kept Florida a no-state-income-tax state for generations.
Magic Kingdom
That “help” to the Legislators – in the form of political donations Disney regularly makes – is on hold, though. In a March 6 letter to employees, Chapek announced the Walt Disney Company would pause all political donations in Florida after the passage of the Parental Rights in Education Act.
Clark said there’s a particular word in Chapek’s announcement that should be heeded: “pause.”
“After Jan. 6 (2021), dozens of companies said they were pausing their donations, and after a few months they came back,” Clark said. “I think he (Chapek) chose his words carefully to leave the door open.”
Mickey Mouse
Clark said this issue is helping DeSantis’s popularity.
“I think they (Disney) expected a sharp exchange between themselves and DeSantis, and then for it to blow over,” Clark said. “But DeSantis has found that this is a great issue for him. He has been unbelievably successful.”
With a rumored DeSantis Presidential Campaign on the horizon, it’s likely Florida’s governor will ride this wave as long as it continues to help grow his base.
“Right now, this governor is at his strongest,” MacManus said.
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Sounds like the analyst was hired by Disney to put this out.
Look at the Disney stock, just hit a 52 week low, that will tell you everything you need to know about this. The investors know this will be a disaster for Disney.
Think about Disney having to pay Orange County by the gallon for water like the rest of us. The fees will be endless!
Always follow the money if this was good for Disney their stock would soar.
Good article. Very informative
Disney should bail on Florida. It’ll take a long time, but the state is heading towards flame out so Disney’s business interests will suffer anyway.
Maybe Disney & especially Chapek should’ve just stayed out of politics. A few, mostly in California complained about a bill in Florida that 67% of the country agrees with. Now the rest of us are going to have to pay for the company being woke & Chapek not having a clue.
Bob Chapek says ” i did that”
As someone who’s always found the RCID a little nightmarish in its concept, this is a good explanation on why it benefits the public as well as the Disney corporation. I was on the fence on where to stand on this issue (I despise DeSantis but am generally all for putting more restrictions on megacorporations), but you’ve helped me make my mind up, thanks for that!
Now Disney can pay permit fees, building application Fees, impact fees, Disney wanted to play politics so…..they win!!!
This article explains the issue and risks better than any other I’ve read. Thank you.
Following.
There is still a point of contention. FL Statute 189.072 says that the residents and land owners must approve dissolution of a special district. That hasn’t been done yet.
And to address what someone said above. Disney does pay permit fees, building application Fees & impact fees. In fact, Reedy Creek also runs a deficit of a few million dollars a year and Disney picks up that cost. This is going to hurt the residents of Orange and Osceola Counties who are going to have to pay for this and it’s going to help no one.
Good. Disney opened their mouths, now they can take their lashings. They don’t deserve special privileges. Before anyone complains, why is it okay for Disney to get special privileges but not Universal? Let that sink in.
Disney is not going to suffer from this, its going to be the two counties that are going to have to come up with a large sum of dollars to beable to cover all of the infastructure services Disney has taken care of for 55 years. Not to mention ALL of those tourism dollars that Disney brings to Florida each year, could be taken elsewhere SOOOO EASILY!! Desantis is a fool ……
State Rep. Randy Fine (R.-Melbourne Beach) said, “Disney is a guest in Florida. Today, we remind them.”
Consider Sir, that most large business in Florida are “Guests”. Perhaps these guests should consider doing less business in Florida and the state can return to it’s primary source of income, air boat tours of the swamp.
I’m glad we’re moving to Polk county so are taxes won’t go up like the other 2 counties. I’m also wondering how this will affect Disney Springs. Rents, etc. I said it before and I’ll say it again. More democrats need to move to Florida.
Interesting stuff. Ultimately, it seems that Florida residents will suffer more than either Disney or DeSantis.
The RCID has been in place for 50+ years. Chapek has managed to mess it up during year one of being CEO. Granted, Florida has a madman as governor, but let’s hope the board at Disney is quickly evaluating the need to make a change. This never would have occurred under Bob Iger and shows the danger of putting someone in the top seat that isn’t suited for it. I’m not sure there could be more catastrophic news for WDW than the elimination of RCID.
I have always enjoyed how clean and well-maintained Disney property has been; however, no private company should have the power Disney has had. They had a good run with their fifedom. No matter the cost, it’s time to dissolve the Vatican of Florida. We all have heard horror stories that have taken place in the parks and are quickly swept under the rug. Hopefully this will put an end to a lot of it.
Just like an unAmerican dictator, DeSantis WILL NOT ALLOW any opposing opinions. The First Amendment is a real inconvenience and DeSantis is nothing but spiteful. Do we really want a bunch of revenge-centered politicians punishing anyone who doesn’t agree with them? This is just theatrics for DeSantis to get himself attention before the elections. Whether the Reedy Creek district is fair or not, isn’t the real issue. The politicians are fine as long as Disney is paying them off, so this is nothing but spite.
People in Florida are drinking the stupid Koolade on this one. Everyone knows, anything the government touches costs you more than the private free market sector. Prepare for taxes and everything else to go up on everything Disney owns goes up and gets passed on to the local taxpayer. They are about to kill the golden goose…Mouse.
Does not take effect until next year. A lot can happen in a year. Hopefully , Bob Chapek will no longer be at the helm.
The entire board and executive team needs to be removed ASAP. They do not represent the values that Walt instilled in his parks. They have destroyed all that was good about “disney”. Now they have trashed the stock value and are losing the Reedy Creek special status that helped the company soar in Florida. DeSantis is a great leader and a very moral person. He knows he is supported by a large silent majority. Our silence is over. We now demand that decent family values be returned to disney parks and decent, wholesome employees be returned to disney employment. Right now the company is lost in wokism and the employees look woke. We need to return to normalcy ASAP
As a great Disney fan, they stuck their foot in it this time. In case they don’t know it they’re an intertainment company so stay out of politics. Seems to me Disney needs new leadership.
DeSantis is a fool who doesn’t care about how his actions affect his state, especially Osceola and Orange Counties. Why his supporters can’t see this is a mystery to me. It sounds like some people may just hate Disney.
You cannot compare Universal and Sea World to Disney. They are businesses that are run in completely different ways. Just because they’re theme parks doesn’t mean you can lump them together. Think Microsoft and Apple. The Reedy Creek deal was, and still is, a benefit to both counties.
And as for Disney not paying taxes, people should read this article, as it is quite informative. Regarding the don’t say gay bill – no one is grooming children to be gay, because, no matter what you believe, that is impossible.
Floridians had better wise up when they vote, because without Disney, central Florida would still be a swamp.
Unfortunately any taxes and fees that Disney has to pay will be passed on to the guests.
All this because little man DeSantis didn’t like someone who voiced their opinion and disagreed with him, so he is having a temper tantrum. And this Clown wants to be President.
I love DeSantis taking control of his state. Too bad Disney played the politics game. They get what they deserve by not staying in their backyard!!! Good for DeSantis!
That’s what happens when you think you’re bigger than the law, you get taken down. All they have to do is raise Disney’s taxes, permit and building fees and put them in line with the other theme parks in Florida that don’t have their privileges, and the taxpayers won’t lose a thing. Disney could easily make up the money by cutting the bonuses and salaries of Chapek and their other top executives. As for the people that think Disney should leave Florida, please tell me how you would move 25,000 acres of theme parks, hotels, and other buildings and where could you possibly put it? Disney needs to do the right thing and apologise and stay out of politics.
Thank you Mr. Chapek. Here comes another round of price increases on evereything.
I’m not a fan of special carve outs only for some businesses. There’s a reason Disney wants this carve out and it’s not because it’s a money loser. The funds going to Disney now would go to the counties. Moving Disney to California is not feasible. There’s a reason everyone is moving out of California to Texas and Florida… cost
Stop the move to Florida. I wish I hadn’t spent money on a timeshare in Florida.
Disneyland got what they deserved. A democrat must of wrote the article. Disneyland was meant to be a family theme park for a real family. Play stupid games win stupid prizes. Why is Disney trying to push the lbgtq agenda on everyone? Good job Florida!!!
Maybe DFB should offer an interview to a political analyst from the opposite perspective and post an article about that too. Just saying.
As a DVC owner, I wish Disney would get out of politics completely. I feel that they are harming the value of my investment, because no matter which side of the political spectrum you are on someone is always going to feel slighted whenever a corporation takes a political stance. In doing this, Disney could be harming the value of my investment simply to placate the desires of a few people in upper management. This is not fair to all of the people who have invested tens of thousands of dollars into DVC properties and may see those property values plummet as a result of any political misstep.
If a company is going to use their largest to start playing politics they should inform investors of this upfront or be prepared to reimburse investors from any subsequent loss that they may suffer as a result of their political involvement.
Disney has been getting its way in Orlando for decades. They could do whatever they wanted to do, no one to answer to.
Now Disney got it wake up call. They are “Woke: but now that they are woke they might realize that they should have kept out of politics.
Now they can pay their share, Now the County can collect the fees Disney has been paying to itself. Now Disney can pay Taxes that they have been paying to themselves. Now Disney will have to go through the same building process’s that every other company is the US has to go through.
Disney had better get back to being a FAMILY business or they can fold. In Orlando they had better look over their shoulder because Universal is expanding and taking their money, Because for now at least Universal is still about the Families and the customer experience. Universal is opening a new Park next year. and they did it going through the local government permit process.
I won’t be back to Disney until the leadership and the current ideals change back to the FAMILY entertainment experience it was created to be.
Yes I put my money where my mouth is too. I sold all my Disney stocks I have been buying since I was 17. I am 65 now. I am sure someone else in buying the stock. But I hope more people like me are dumping them.
Disney can make Magic anywhere. Maybe it’s time to build a more innovative Disney World somewhere else. Florida will suffer greatly from global warming. De Satan had taken away the welcome, Move on Disney. Florida isn’t the magic, Disney is the Magic..
Reedy Creek is not a “special” carve out. It is a legitimate political sub division in the State of Florida. Like many other government entities it loses money. Disney has to subsidize it’s costs every year, some years it’s in excess of $10 Million dollars. It operates independently of Disney; they don’t interfere in its operation.
Yes, the “funds” going to Reedy Creek will go to the two counties. So will the $9 Billion in debt service for the bonds that were issued to pay for Disney’s infrastructure. It’s been estimated that Orange County residents will have to pay an additional $2,500 a year in taxes for at least the next 20 years to service Reedy Creek’s debt. There is also the question of how much the counties need to pay the residents and land owners in Reedy Creek today for the assets they will be acquiring that Reedy Creek currently owns.
There is also a clause in every bond sold that states “the state will not ‘limit or alter’ the rights of Reedy Creek to collect revenue, including levying taxes”. What? There is already talk from institutional bond holders about a lawsuit to stop this thing.
Then there is the fact that Reedy Creek collects about $164 million in property taxes to maintain roads, utilities and other services, which is almost entirely paid by Disney but no other governmental authority has the ability to collect that money if Reedy Creek goes away..
Doesn’t anyone realize who gets the financial windfall for this action? Disney gets rid of a whole lot of debt and still gets the services. The counties can’t turn anything off. They still have to pay for fire, pay for the power plants, pay for water treatment, pay for garbage disposal, pay for EMT services.
Senate President Wilton Simpson said he expects the matter will be discussed further when the Legislature convenes next year. He thinks it’s only going to take 6 months to unravel Reed Creek? He’s living in a dreamworld.
This entire thing wasn’t thought through in Tallahassee, not one bit. It’s all because the governor was upset when Disney called him out on a bill. Talk about a spoiled child. He almost wants me to switch from Republican to Democrat.
Who said that entertainment (companies) and politics don’t mix? Are you kidding? Watch an awards show, politics are usually mentioned, also, songs, movies, tv shows (SNL anybody?). How about some governors who were actors. Then, of course, President Reagan – to those young people, he was an actor. Entertainment and politics have always mixed. Need I remind you that Chapek finally spoke out because of badgering by his employees.
People, including entertainment companies, have talked politics for as long as I can remember. First Amendment.
As per the Orlando Newspaper, Disney DOES NOT pay impact fees and other taxes. To all the misinformed, your welcome.
Known as the Reedy Creek Improvement District, the agency is able to sell tax-exempt bonds, write building codes, condemn property, develop and maintain its own infrastructure and offer fire and emergency services. It can levy taxes. And it can build whatever it wants — whether a theme park or an airport — most of it without the typical local oversight that encumbers regular developers.
Reedy Creek is made up of two cities, Bay Lake (population: 20) and Lake Buena Vista (population: 24). Disney owns most of the property and, as a result, controls who is appointed to run the district.
There is also another important benefit for Disney tucked inside Reedy Creek’s 92-page charter. Construction inside the district is exempt from certain taxes and fees added by the county governments after Reedy Creek was created.
That means Disney doesn’t pay impact fees. Those are the one-time payments developers make to offset the cost of public services like roads. The district pays for many of its own services, like fire and maintenance for the roads inside its boundaries. But if Reedy Creek didn’t exist, Disney would pay the fees, like any other developer, to Orange and Osceola counties.
At one point, Disney’s exemption from paying impact fees raised eyebrows from officials in Orange County.
Hat tip to Danielle who points out the threat to the RCID bond holders. Florida taxpayers will owe billions in interest and principal if Florida dissolves Reedy Creek. And the bonds likely can be called in the event of default, which this would be. That means the money would be due now and Florida would have to go to market with all new bonds to refinance the RCID bonds. And with rising interest rates, those new bonds will be much more expensive. If you live in Florida, start saving your money because you will be paying for this stunt for decades.
The best part of hearing all these ‘exoerts’ voice an opinion is knowing we can look back on these stories next year and see who was being factual and who was being political.
Not being an expert myself, I would just assume this land would now be assessed and taxed accordingly. I’d expect the improvements since 1967 would be in the billions ..even undeveloped landed has skyrocketed over the years, so every acre would now have to be assessed ..not just the developed areas.
It will be interesting to see how this turns out, then we can look back on these stories and see if the media was selecting opinions to warn the public or attempting to scare them for political purposes.
Their property has been reassessed every few years. Orange and Osceola are responsible for assessing Disney property. The Reedy Creek act didn’t negate Disney from paying taxes to the two counties, it enabled Reedy Creek to assess additional taxes on its property owners.
Interesting points of view. Very political in nature.
I was wondering why, if the Reedy Creek Improvement District is such a bad idea, why has it been in place for over 50years? Why has no municipality or government or legislature in the past 10years looked at this special district and come to the conclusion that this deal that Disney has was not something that had merit, or helped anyone, or was beneficial to bring tourist dollars to Florida?
Let’s look at when it was first introduced. Yes, it helped Disneyland develop and become a star attraction for tourism in the state. That took about 25years to be solidified (if not sooner) and Disneyland has succeeded in being a star attraction in the state. And it prompted other ‘theme’ parks to see the merits of doing business in Florida. That means for at least 25years the Reedy Creek Improvement District had done its job, Disneyland had benefitted, and the state of Florida had benefitted. It was at that time 25years ago the special district should have been removed. But it wasn’t. Why not? Was it because it was still beneficial?
Now that DeSantis has had his nose put out of joint because a corporation such as Disneyland (a corporation within Florida that pays substantial taxes and has every right to voice their opinion) makes a comment that reflects their values (and seems to be contrary to DeSantis’ values since DeSantis has taken exception to their comments) politics is driving that the Reedy Creek Improvement District is no longer valid! Talk about the tail wagging the dog!
I know now why I am not going to spend my family vacation dollars in Florida this year and probably for the next 5years minimum.
I find it interesting that Florida gives Disney carte blanche when California does not. In fact In Cali Disneyland pays almost 40% in taxes to California. Disney should pay their fair share in Florida.
I believe Disney World pays well over 700 million in state and local taxes. I don’t think that’s an insignificant amount, especially considering how much money in tourism they bring in.
Why does anyone think Disney does not pay it’s fair share? They pay a millage rate of 10 cents like everyone else does in Orange and Osceola Counties. They pay an additional 30 cent millage rate to Reedy Creek. So how do you really want Disney to pay the same as everyone else?
James, you’re funny! De Satan? Seriously? May I remind you Pay-check brought this in himself! Plus this whole bit of speculation sounds more like a scare tactic.