Florida Gov. DeSantis may repeal Disney's special tax status. But tax officials and legislators say the move could leave local taxpayers to cover more than $1 billion in bond debt.
Floridalawmakers voted on a bill to strip Disney's special tax status.
- But taxpayers might have to cover the debt if the special status is repealed, CNBC reported.
Tax officials and legislators say that a law dissolving Disney's self-governing status could saddle local taxpayers with more than $1 billion in bond debt, CNBC reported Thursday.
Florida Republicans passed a bill Thursday that could repeal the company's special-improvement district, effective June 2023. The bill comes after the company spoke out against the state's recent Parental Rights in Education bill, dubbed by activists and critics as the "Don't Say Gay" bill.
In 1967, Florida state legislators created a special taxing and governance district known as the Reedy Creek Improvement District, in which the landowners — primarily Walt
Scott Randolph, the tax collector for Orange County, told CNBC that the Reedy Creek district collects about $105 million a year in general revenue, on top of the more than $280 million Disney pays in property taxes — making it the largest taxpayer in central Florida.
The legislation approved Thursday by lawmakers seeks to sunset Reedy Creek by June 2023. If dissolved, the responsibility for municipal services then falls upon the neighboring counties of Orange and Osceola.
"If you dissolved Reedy Creek, that $105 million in revenue literally goes away, it doesn't get transferred," Randolph said, therefore saddling taxpayers to cover part, if not all, of the costs.
However, Florida state Rep. Randy Fine, who helped spearhead the bill to sunset Reedy Creek, told CNBC that local taxpayers would actually benefit from Disney being stripped of its special tax status, saying the tax revenue generated by Disney would instead go to local government and would cover the services.
"Those taxes will continue to be paid," Fine said. "They will just be paid to Orange and Osceola county instead of this special-improvement district. The taxpayers could end up saving money because you've got duplicative services that are being provided by this special district that are already being done by those municipalities."
But aside from responsibility for municipal services, tax experts and legislators also warned that dissolving the district means transferring its bond liabilities — totaling between $1 billion and $1.7 billion — to other local governments, CNBC reported.
State Senate Minority Leader Gary Farmer told CNBC if the liabilities are shifted to Orange and Osceola counties, the debt could add another $1,000 per taxpayer.
"If the counties are left holding the bag, the state might have to come to their aid," Farmer said. "So it's not even just a tax issue for these two counties. It affects every taxpayer in the state of Florida."
Farmer proposed an amendment to the Disney tax-status bill to allow for time to study the bond debt, but it was shot down with a voice vote. Fine said the bond liabilities would be covered by tax revenue that Disney pays.
"We shouldn't be moving at warp speed on something that can have such far-ranging economic impacts," Farmer said.
Representatives for Walt Disney World, Farmer, and Fine did not immediately return Insider's request for comment.
Stripping Disney of its self-governing status is the latest development in the company's fight with GOP state lawmakers over the 'Don't Say Gay' bill
Last month, Disney's CEO Bob Chapek came under fire — both internally by employees and externally via protests at the company's theme parks — following the company's initially tepid denouncing of the state's controversial LGBTQ legislation, despite the large part it plays in the state's economy.
The LGBTQ legislation, signed into law by Gov. Ron DeSantis on March 28, would, in general, ban discussions of sexuality and gender identity in classrooms from kindergarten to third grade and would allow parents to sue schools if staff members facilitate those conversations. It is set to go into effect on July 1.
On March 28, the same day DeSantis signed the bill into law, Disney released its most critical statement thus far against the legislation, saying it "should never have passed and should never have been signed into law."
"Our goal as a company is for this law to be repealed by the legislature or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that," a spokesperson for the company said.
In response, DeSantis slammed the company, saying it "crossed the line" with its statement and effort to repeal it, which he called "fundamentally dishonest."
On Thursday, Newsmax host Eric Bolling asked Lt. Gov Jeanette Nuñes if the governor would reconsider repealing Disney's special tax status if the company gave up its "'woke' agenda.'"
"Is there an opportunity for Disney to change their mind and say we will disregard this whole 'woke' agenda. And would the governor then say, 'Fine, you can keep your status but we're gonna keep an eye on you now'?" Bolling asked, to which Nuñes replied: "Sure."
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