Floridians May Face a $1 Billion Disney Debt Now
Now that Governor DeSantis revoked Disney’s self-government status, Floridians may face a $1 billion Disney debt. This is according to tax officials and legislators.
The Bill Passed
A bill to dissolve Disney’s special improvement district officially passed today. This is a response by Governor Ron Desantis to the Walt Disney Company’s opposition to Florida’s Parental Rights in Education bill. The House introduced the bill on Tuesday, the Senate passed it on Wednesday, and the governor signed it today.
The District’s History
Disney established its Reedy Creek Improvement District in 1967. It gave the Walt Disney Company complete regulatory control over Walt Disney World and government services. Government services include fire protection, emergency services, water, utilities, sewage, and infrastructure.
The Reedy Creek district spans 25,000 acres in Orange County and Osceola County. It includes Walt Disney World’s four theme parks, two water parks, and a sports complex.
The district also includes two small cities, Bay Lake and Lake Buena Vista. Its population was 53 in 2020, and it houses Disney representatives and employees.
The district’s elimination occurs in June 2023 and it may have huge consequences for county taxpayers. Currently, Disney taxes itself to fund Reedy Creek’s services. It collects about $105 million in general revenue according to Scott Randolph, Orange County’s tax collector.
In addition, Disney pays local property taxes. Records show Disney as the largest taxpayer in central Florida, and the company paid $280 million in property taxes between 2015 and 2020.
Now that the Reedy Creek district dissolved, Orange County and Osceola County must provide the local services. The counties lost $105 million in revenue; therefore, county and local taxpayers must cover the costs.
Scott Randolph said once Reedy Creek dissolves, “…$105 million in revenue literally goes away, it doesn’t get transferred.” This is because Reedy Creek is an independent tax district, so it generates tax revenues as well as its local tax obligations. There is no replacement for them.
Now that the Florida government eliminated the district, the tax payments to Orange County and Osceola County do not increase. Florida State Representative Randy Fine said that local taxpayers would not pay more. He claimed that the tax revenue paid by Disney transfers to the local government, and it could more than pay for the added services.
Fine said, “Those taxes will continue to be paid. They will just be paid to Orange and Osceola county instead of this special improvement district.” The taxpayers may save money because municipalities conduct duplicative services provided by this special district.
However, legislators and tax experts believe that Floridians may face problems due to a total of $1 billion in bonds. Financial filings reveal that Reedy Creek has bond liabilities of between $1 billion and $1.7 billion.
It Could Be Even More
State Senate Minority Leader Gary Farmer said the bond debt may total more than $2 billion. He believes tax authorities increase their estimates after learning more about the district’s outstanding liabilities.
Farmer stated, “This is a very real impact, the extent of which we don’t fully understand yet. If the counties hold the bag, the state might have to come to their aid. So it’s not even just a tax issue for these two counties. It affects every taxpayer in the state of Florida.”
Randy Fine argued that if the counties transfer the bonds, then they also transfer the tax revenue that currently funds the bond payments.
“The Reedy Creek Improvement District is a local government right now,” he said. “So the taxpayers of that district already owe that money. Yes, the bonds would go to other municipal governments in the same place. But the revenues go along with it. The improvement district taxes Disney. Those taxes pay that debt.”
Gary Farmer stated, “We shouldn’t be moving at warp speed on something that can have such far-ranging economic impacts.”
As Floridians may face a huge Disney debt, many wonder about what the future holds in the Sunshine State. As always, MickeyBlog brings you the latest updates.
Article Information: CNBC
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