Cinderella’s Castle in the Walt Disney World.
Roberto Machado Noah Lightrocket | Getty Images
Florida Gov. Ron DeSantis is targeting Disney World.
On Thursday, the Florida legislature passed a bill to dissolve a special area that allows the Walt Disney Company to act as its own government within the outer borders of Orange and Osceola counties. The bill passed the U.S. Senate on Wednesday by 23-16 votes and passed the state House of Representatives in a 70-38 vote count.
The proposal was first unveiled on Tuesday by Republican Sen. Jennifer Bradley, but opponents say it was indeed driven by DeSantis, who is locked into a fierce and public feud with the entertainment giant over the company’s denunciation of last year’s Florida HB 1557 law. month. HB 1557, called the Don’t Say Gay bill, restricts early childhood education on sexual orientation or gender identity.
Until recently, there was little public debate about disbanding Disney’s long-established special area, which has been occupied for 55 years, prompting disgusting senators and other critics of the bill to question its timing and speed.
State Representative Randy Fine told CNBC’s Squawk Box on Thursday that the bill was not answered, but said that “when Disney kicked the hornet’s nest, we looked at special areas.”
“People have wanted to deal with the special area for decades,” he said. “Disney had the political power to prevent it for decades. What has changed is the importation of California valuables into Florida. Florida said, “You’re a guest. Maybe you don’t deserve special privileges anymore. “
Fine said the bill had even been introduced for the Florida playground for theme park operators. He noted that the competition from Disney, Universal, SeaWorld and Legoland do not have special areas to work in.
Democrats in the U.S. Senate, though fewer, defended the theme park on Wednesday during a special session of the body.
“Disney Corporation has been attacked for supporting its many LGBTQ employees and clients,” said Sen. Tina Polski, a Democrat who represents Florida’s 19th district, during a special session. “Are we really making this huge decision out of malice?”
And this is a huge decision.
The area in question is the Reedy Creek Improvement District, which was established in 1967. It was created by the Florida Legislature to enable Disney to develop the Walt Disney World infrastructure for free for taxpayers in Florida.
None of this makes any sense. They just bite a lot more than they can chew, trying to break up the Reedy Creek area. ”
Linda Stewart
U.S. Senator for the 13th District of Florida
The agreement allowed Disney to build theme parks, hotels and other tourist experiences in the Reedy Creek area with little or no supervision. The company also became the largest employer of Florida residents in the state and helped the Orlando area become one of the largest tourism centers in the United States.
“I just don’t understand what we’re doing here,” said Laurent Osley, a Democrat who represents the state’s third county seat, during Wednesday’s session. “We add insult to the injury by voting today on something that was proposed yesterday, following private business that literally made our country what it is, all because they took a position with which the governor disagrees.
Decades of legislation have also ensured that only landowners in the area, mostly Walt Disney World, will be responsible for paying for municipal services such as electricity, water, roads and fire protection.
For decades, Orange and Oceola County taxpayers have been spared maintenance bills for Disney Park services.
Disney currently pays taxes to both counties and the Reedy Creek area. If the bill passes the Florida House of Representatives, when it is put to a vote Thursday and signed by DeSantis, Reedy Creek, along with five other special areas created before November 1968, will be dissolved on June 1, 2023.
Reedy Creek, as a special county, has no representatives in the state legislature.
Debt assumption
Dissolving the area would mean that Reedy Creek’s staff and infrastructure would be absorbed by local counties, which would then become responsible for all municipal services. The counties will collect the tax revenue that Disney currently pays to the Reedy Creek area, but will also be burdened with county debt. Namely her duty.
Reedy Creek has historically made a loss of about $ 5 million to $ 10 million each year, according to financial statements. But because Disney can subsidize its own operations with revenue from theme parks, this debt has little effect on the end result.
According to lawmakers, there is a debt of about $ 1 billion on the balance sheet, for which taxpayers will be responsible if the special area is used, which will lead to higher taxes.
“No one wants to take that amount on debt,” Linda Stewart, a Democrat who represents Florida’s 13th Senate, told CNBC on Wednesday. “None of this makes any sense. They just bite a lot more than they can chew, trying to break up the Reedy Creek neighborhood … It’s a major, fundamental problem that I don’t think will be very successful in the end. “
Taxpayers will also be on the hook for any municipal improvements that Disney is currently paying for, including road works.
In 2019, for example, Disney’s Orlando neighbor Universal partnered with Orange County and the state to build a 1.7-mile extension to Kirkman Road between Carrier Drive and Universal Boulevard to accommodate Epic Universe’s new fleet.
This project cost approximately $ 300 million, more than half of which Universal footed. The company paid $ 160 million, leaving Orange County to pay $ 125 million and the state to pay about $ 16 million.
The section on similar projects in Disney projects can easily be accumulated.
“Nothing will happen”
Disney declined to comment on the legislature’s efforts, but the dispute is likely to end in court, according to David Ramba, executive director of the Florida Special Districts Association.
Ramba said he had disbanded a number of special areas, but never those that did not want to be disbanded, and noted that “many lawyers will be paid” while the parties work to settle the operational consequences of the bill.
Florida law dictates that special areas created by the legislature can be dissolved only by a majority vote of the landowners in the area. For Reedy Creek, this is the Walt Disney Company.
“Nothing will happen,” said Jason Pico, a Democrat who represents the state’s 38th county seat, during a special session on Wednesday. “Everyone in this room knows this isn’t going to happen. I’m just tired of missing my kid’s baseball games for things we know won’t happen.”
Pizza was among several U.S. senators who spoke out against the bill ahead of Wednesday’s Senate vote. Many expressed disappointment during the parliamentary debate, calling the law a “revenge bill” and a “political theater”.
“[The governor] he wants to prove something, “Stewart said.” He wants to prove he’s more powerful, but I don’t think he’s more powerful than Disney. “
Disclosure: NBCUniversal is the parent company of CNBC.
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