Florida Gov. Ron DeSantis last week signed a bill to strip Disney of its self-governing authority around Walt Disney World but things may not be so simple, The Miami Herald reports.
The Reedy Creek Improvement District allowed Disney to act like municipal government, creating its own rules, taxing itself, and raising funds by issuing bonds.
The Republican bill stripped Disney of its authority in retaliation for the company’s opposition to the legislature’s “Don’t Say Gay” bill.
“No individual or no company in Florida is treated this way, and it’s not right to have this similar treatment. But you know, they had exercised a lot of power over the years. It was never anything that was debated. In fact, I don’t even know that I knew the name of it prior to this becoming something that was live in the past few months,” DeSantis said last week.
Disney hits back:
Disney in a statement said the law won’t stand up in court because the state promised bond holders it would not modify the status of the district.
When Florida approved the district in 1967, it agreed not to "limit or alter the rights of the district" until "all such bonds together with interest thereon" are "fully met and discharged."
DeSantis claimed Monday that "under no circumstances will Disney not pay its fair share of taxes," and "under no circumstances will Disney not pay its debts."
But the Herald reported that in fact, “Disney has more power 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,” Orange County tax collector Scott Randolph told the Herald.
Tax lawyer agrees;
"Dissolving Reedy Creek 'limited' and 'altered' its ability to improve and maintain its project and collect its various charges and taxes, and thus Florida would be violating its pledge to bondholders,” Florida tax attorney Jacob Schumer wrote in a Bloomberg op-ed.
"However, even without that explicit language, the bill dissolving Reedy Creek would have problems under contracts clauses of the Florida and U.S. constitutions,” he wrote.
If Disney gets around the pledge — and "states usually aren't in the business of arguing that their own promises are bad," Schumer wrote, Disney’s bond obligations would fall on Orange and Osceola County residents, hiking their taxes.