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DeSantis wanted to punish Disney. Repealing its tax status may hurt taxpayers instead

Disney operates like its own county government in Florida — but that could change, if Gov. Ron DeSantis signs a new bill lawmakers approved this week. Here, tourists walk through Disney Springs at Walt Disney World in Orlando, Fla., last month.
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Disney operates like its own county government in Florida — but that could change, if Gov. Ron DeSantis signs a new bill lawmakers approved this week. Here, tourists walk through Disney Springs at Walt Disney World in Orlando, Fla., last month.

Updated April 22, 2022 at 4:07 PM ET

Gov. Ron DeSantis on Friday signed a bill stripping Disney World of its status as an "independent special district," fulfilling his request to punish the Disney company for its stances on social and education issues.

The bill will undercut Disney's autonomy, but it could impose a steep cost on Orange and Osceola counties, where the theme park is located. The two counties would inherit the Disney district's debts, which officials say would result in higher taxes.

Here's a quick rundown of the situation:

Does Disney really have its own government in Florida?

Disney gained near-total control over its theme parks and other attractions in 1967, when the state designated the area as the Reedy Creek Improvement District. The land measures 25,000 acres — nearly 40 square miles — in Central Florida.

Disney operates like a county government, building and maintaining municipal services like electricity, water and roads, and providing police and fire protection. It even taxes itself. The setup was intended to give Disney autonomy while also relieving the counties of paying for new services and infrastructure in what was once a remote and rural area.

But Reedy Creek's status changes under the measure DeSantis signed: Senate Bill 4-C, targets it and five other independent special districts that were created before 1968.

Why will Disney's debt transfer?

The Florida Senate's own financial impact analysis of the bill states that in most cases when a county takes over a special district, it "shall also assume all indebtedness of the preexisting special district." In Disney's case, that could put local governments on the hook for about $1 billion in bond debt.

The state Senate's analysis concluded that the bill would have an "indeterminate fiscal impact" on residents and businesses in special districts, as well as on local governments that will assume debts and assets.

The change promises to shake up the local tax picture, according to Scott Randolph, a Democrat who is the Orange County tax collector.

"If Reedy Creek goes away, the $105 million it collects to operate services goes away," Randolph said via Twitter. "That doesn't just transfer to Orange County because it's an independent taxing district. However, Orange County then inherits all debt and obligations with no extra funds."

Disney also taxes itself around $53 million each year to service its debt obligations, Randolph said.

The situation quickly prompted warnings that county property taxes will sharply rise. Citing an interview with Randolph, Danielle Prieur of member station WMFE in Orlando reports, "homeowners here could see property taxes jump by 20% to make up the difference. And even then, it probably wouldn't be enough to cover all the money that would be lost."

Why is Florida acting now?

The Florida Legislature needed just three days to introduce and approve the bill, which DeSantis requested on Tuesday as part of a special session that was initially called to deal with the state's redistricting effort.

Disney wields great influence in Florida, and it donated to DeSantis during the 2020 election cycle. But the company didn't agree with his policies on COVID-19 vaccine requirements, or face coverings. The growing rift deepened this spring, as DeSantis accused the entertainment giant of embracing "woke" viewpoints.

"In recent weeks, the tensions heightened when Disney CEO Bob Chapek said he'd support the repeal of Florida's Parental Rights in Education Act, a measure critics call 'Don't Say Gay,' " as NPR's Greg Allen reported. "At the time, DeSantis said he believed Disney had 'crossed the line.' "

What will the bill mean for Disney and the Florida counties?

The new bill will formally take effect on July 1. But its sweeping changes wouldn't come into force until next summer, on June 1, 2023. That's when the six special districts targeted by lawmakers are slated to be dissolved, giving Orange and Osceola counties new responsibilities.

"Disney was in charge of ambulance services and fire services," reports WMFE's Prieur. "So if someone has a heart attack or a car accident, now it's up to the county to figure out how to handle that — and how to foot the bill.

"Also, Disney now will need approval before it expands on all of its wonderful theme parks, hotels, restaurants, new rides. There's a lot of red tape now involved."

Questions remain about how the new bill will work and how it will affect the local governments. It's also possible Disney's and other affected independent districts will be able to work out a new arrangement before the formal changeover: The legislation expressly states that the districts can be "reestablished on or after June 1, 2023" — the date that they would be dissolved — as long as they comply with state laws.

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