Analysts Say Florida Stripping Disney World’s Power Could Cost Residents and Counties

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, @WaltDisneyWorldwould 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 forwardsince 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 construction

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,” hey said Monday in a tweet. “Today, we remind you.”

“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 Newsome 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,” Newsome 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 at 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 Florida has kept a no-state-income-tax state for generations.

MagicKingdom

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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