At the time Walt Disney World was proposed to be built in the mid-60s, the 25,000-acre property where the recreational development would take place could not be supported by the surrounding Orange and Osceola counties. They did not have the services or the resources to bring Disney World to life. In 1967, the Florida State Legislature worked with the Walt Disney Company to create a special-tax district that would enable Disney to move forward building the happiest place on earth.
The special-tax district named Reedy Creek Improvement District was created in 1967 by a special act of the Florida Legislature. This act allowed Disney to develop the infrastructure for Walt Disney World at no cost to Florida taxpayers. The District encompasses approximately 25,000 acres servicing 24 landowners, the largest of them being Walt Disney World. There is a five-member Board of Supervisors that governs the District, who are elected by the landowners in the District. As the majority landowner in Reedy Creek, Walt Disney Company selects the Board members, usually made up of senior employees of the Walt Disney Company. The goal of the Board is to support the economic viability of all venues and businesses within the District and support local tourism, all while protecting the wildlife and ecological environment in Central Florida.[1]
Reedy Creek has special taxing powers and independence from local laws. It has the ability to act with the same authority and responsibility as a county government. Reedy Creek essentially acts as its own town and government, providing power, water, wastewater, emergency medical, fire protection, police and other services to the District. In addition to these services, Disney has built and maintains more than 130 miles of roadways and 67 miles of waterways within the Reedy Creek boundaries.[2] Disney pays property taxes to Orange and Osceola counties and to Reedy Creek. Reedy Creek then uses that tax money to fund theme park projects, services, operations, and infrastructure upkeep without interference from local counties. Residents of Orange and Osceola counties do not have to pay for these services through their own taxes because of the special-tax district.
In April 2022, Governor Ron DeSantis signed a bill into law which planned to completely dissolve Reedy Creek, stripping Disney of the tax benefits and control over the special district. This bill was aimed at punishing Disney for its public opposition to Florida House Bill 1557. House Bill 1557, known as the Parental Rights in Education Act, or “Don’t Say Gay” bill as it is called among critics, was passed one month prior in March 2022. The “Don’t Say Gay” bill is an education law that limits the discussion of sexual orientation and gender identity in classrooms from kindergarten through third grade. Disney’s CEO at the time, Bob Chapek, stated Disney would suspend political donations in the state and support organizations that oppose the “Don’t Say Gay” bill. Disney’s public opposition only came after Disney employees began protesting the bill and their employer for not strongly opposing the bill. [3] Mr. Chapek mentioned that he did not want to publicly oppose the bill and allow Disney to become a “political football.” At a shareholder meeting, Mr. Chapek stated that Disney opposed the bill from the outset, but thought Disney could be more effective working with lawmakers behind the scenes.
“If you are out protesting this bill, you are, by definition, putting yourself in favor of injecting sexual instruction to 5, 6 and 7-year-old kids. I think most people think that’s wrong. I think parents especially think that’s wrong,” said DeSantis. Opponents of the bill are worried that it will cause children to fear speaking publicly about their own LBGTQ families and chilling speech. Republican Representative Jim Banks from Indiana even sent a letter to Mr. Chapek opposing extending the original copyright for Mickey Mouse because he objects to Disney’s support of LBGTQ issues.[4] In response to Disney’s public opposition to the law, DeSantis called Disney a “woke corporation” that was working to undermine Florida parents. “I will not allow a woke corporation based in California to run our state,” stated DeSantis. [5] Woke is interpreted as meaning being aware of and actively attentive to important societal facts and issues (especially issues of racial and social justice). DeSantis’ re-election campaign last year focused on ending “woke” culture in order to stay in line with the values of parents and voters in Florida.
In November, Disney’s former CEO, Bob Iger, was brought back to replace Bob Chapek after quarterly earnings were down. When commenting on the turmoil in Florida, Bob Iger said he was “sorry to see us get dragged into” a political fight, adding, “the state of Florida has been important to us for a long time and we have been very important to the state of Florida.” DeSantis told Fox News after Bob Iger’s comments, “We didn’t drag them in. They went in on their own and not only opposed the bill, but threatened to get it repealed.”[6]
The law dissolving Reedy Creek was due to go into effect in June 2023. Dissolution of Reedy Creek’s special status would leave $997 million in bond debt and $163 million in annual tax payments that could fall upon the citizens of Orange and Osceola Counties.[7] After the original bill was signed into law, the Florida Legislature quickly realized that the taxpayers would have to pick up the debt and taxes that Disney had been responsible for and brought the issue back up in a special legislative session earlier this month.
One of the main issues that Bob Iger has been working on since he took over as CEO is working with Florida lawmakers to reverse the law that would strip Disney of its special tax-district this upcoming June. On Monday, DeSantis signed House Bill 9-B during a press conference in Lake Buena Visa stating, “The corporate kingdom finally comes to an end.” The new bill would keep Reedy Creek District intact and leave the most important functions intact, a big change from the original bill last April. The biggest changes that Bill 9-B makes will rename the Reedy Creek Improvement District to the Central Florida Tourism Oversight District and allow for the governor to now appoint its Board members. Disney will still be liable for the bond debts and approve plans without scrutiny from certain local regulators. The changes will also make it possible for the new Board to impose taxes on Disney to help fund road improvements outside of Disney World’s boundaries.[8] Some of Disney’s exemptions from state regulatory reviews will also be eliminated, causing the cost of building projects to increase. DeSantis named Martin Garcia, a Tampa attorney, head of a private investment firm and a Republican donor, as new chairman of the board, along with other handpicked supporters. [9]
Possible GOP rivals have been critical of DeSantis’s actions. New Hampshire Governor Chris Sununu stated that penalizing businesses for political speech is setting “the worst precedent in the world.” Disney has yet to comment on today’s outcome of the new law dissolving Reedy Creek. In a statement to CNN after the bill passed the state legislature earlier this month, Jeff Vahle, the president of Walt Disney World Resort, said the company was “ready to work within this new framework, and we will continue to innovate, inspire and bring joy to the millions of guests who come to Florida to visit Walt Disney World each year.”[10] Only time will tell if the happiest place on earth will remain “happy” with the new law.
[1] Reedy Creek Improvement District, https://www.rcid.org/
[2] McCloud, Cheryl, “Gov. DeSantis targets Reedy Creek. 10 things to know about the Disney-run tax district,” Tallahassee Democrat, 6 Feb. 2023, https://www.tallahassee.com/story/news/local/state/2023/02/06/disney-reedy-creek-improvement-district-in-florida-what-is-it-and-how-does-it-work/69875766007/
[3] Prieur, Danielle, “Disney workers protest the company’s response to the so-called ‘Don’t Say Gay’ bill,” NPR, 23 Mar. 2022, https://www.npr.org/2022/03/23/1088169718/disney-workers-protest-the-companys-response-to-the-so-called-dont-say-gay-bill
[4] Whelan, Robbie and Campo-Flores, Arian, “Disney Faces Backlash in Florida Amid ‘Don’t Say Gay’ Controversy,” The Wall Street Journal, 15 Apr. 2022, https://www.wsj.com/articles/disney-faces-backlash-in-florida-amid-dont-say-gay-controversy-11650027780
[5] Barnes, Brooks, “DeSantis Declares Victory as Disney Is Stripped of Some 56-Year-Old Perks,” The New York Times, 10 Feb. 2023, https://www.nytimes.com/2023/02/10/business/disney-world-florida-tax-board.html
[6] “Has Bob Iger Brokered a Truce With Florida?” The New York Times, 2 Dec. 2022, https://www.nytimes.com/2022/12/02/business/dealbook/disney-florida-tax-iger.html
[7] McCloud, Cheryl, “Gov. DeSantis targets Reedy Creek. 10 things to know about the Disney-run tax district,” Tallahassee Democrat, 6 Feb. 2023, https://www.tallahassee.com/story/news/local/state/2023/02/06/disney-reedy-creek-improvement-district-in-florida-what-is-it-and-how-does-it-work/69875766007/
[8] McCloud, Cheryl, “Gov. DeSantis targets Reedy Creek. 10 things to know about the Disney-run tax district,” Tallahassee Democrat, 6 Feb. 2023, https://www.tallahassee.com/story/news/local/state/2023/02/06/disney-reedy-creek-improvement-district-in-florida-what-is-it-and-how-does-it-work/69875766007/
[9] Campo-Flores, Arian, “Ron DeSantis Appoints Allies to Oversee Disney’s Special-Tax District,” The Wall Street Journal, 27 Feb. 2023, https://www.wsj.com/articles/ron-desantis-appoints-allies-to-oversee-disneys-special-tax-district-30be431f
[10] Contorno, Steve, “DeSantis signs a bill that gives him more control of Disney’s special district,” CNN, 27 Feb. 2023, https://www.cnn.com/2023/02/27/politics/desantis-disney-reedy-creek/index.html
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