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Disney to lose special tax status in Florida amid ‘Don’t Say Gay’ clash

Representative Carlos Guillermo Smith, D-Orlando (blue suit, in back) yells his objection as Republicans in the House of Representatives applaud after Senate Bill 4C Independent Special Districts, which affects Disney, passes Thursday, April 21, 2022 at the Capitol in Tallahassee, Fla.Phil Sears/Associated Press

Disney employs 38 lobbyists in Florida’s capital. Each election cycle, the company gives generous campaign contributions to Florida candidates on both sides of the political aisle. Its theme park megaresort near Orlando attracts around 50 million visitors a year, powering a Central Florida tourism economy that annually generates more than $5 billion in local and state tax revenue.

The upshot: Disney usually gets whatever it wants in Florida.

That era ended Thursday, when the Florida House voted to revoke Disney World’s designation as a special tax district — a privilege that Disney has held for 55 years, effectively allowing the company to self-govern its 25,000-acre theme park complex. The Florida Senate voted Wednesday to eliminate the special zone, which is called the Reedy Creek Improvement District. Having cleared the way to this outcome with a formal proclamation, Governor Ron DeSantis will almost certainly make the measure official by adding his signature. It would take effect in June next year.

The swift effort to dissolve Reedy Creek by Florida Republicans has been widely seen as brazen retaliation after Disney, Florida’s largest private employer, paused political donations in the state and condemned a new education law that opponents call “Don’t Say Gay.” Among many things, the law prohibits discussion about sexual orientation and gender identity through the third grade in Florida classrooms and limits it for older students.

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“If Disney wants to pick a fight, they chose the wrong guy,” DeSantis, a potential Republican presidential candidate in 2024, wrote in a fund-raising e-mail to supporters Wednesday. “I will not allow a woke corporation based in California to run our state,” he continued. “Disney has gotten away with special deals from the state of Florida for way too long.”

DeSantis added: “Disney thought they ruled Florida. They even tried to attack me to advance their woke agenda.”

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Disney declined to comment.

The Reedy Creek Improvement District, enacted in 1967 to entice Disney to build a theme park 20 miles south of Orlando, saves the company millions of dollars annually in fees and taxes, experts estimate.

Florida has hundreds of similar special tax districts that would be left in place. One covers The Villages, a huge senior-living community northwest of Orlando. Another covers Daytona International Speedway and the surrounding area.

The designation has been a critical tool for Disney in developing the resort, which includes six theme parks; a sprawling outdoor shopping mall; a 220-acre basketball, soccer, volleyball, lacrosse, baseball, and competitive cheer complex; and 18 Disney-owned hotels with 24,000 rooms. Disney World has a bus fleet that rivals that of St. Louis.

In 2021, Disney World paid more than $780 million in state and local taxes, according to a Disney disclosure.

Disney World straddles two counties, Orange and Osceola, which would be required under state law to step in and provide a version of the services currently handled by Reedy Creek, almost certainly leading to increased taxes for their residents. Orange County’s tax collector, Scott Randolph, has estimated that residents would see property taxes climb as much as 20 percent. Reedy Creek has an annual budget of $355 million, according to public records. It carries $977 million in debt, which would also be transferred to the counties.

The clash between DeSantis and Disney started March 9, when the company — under acute pressure from its employees — spoke out against the Parents Rights in Education legislation, or what opponents called the “Don’t Say Gay” bill.

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More than 150 companies, including Marriott and American Airlines, had already signed a Human Rights Campaign letter opposing the legislation. Disney, however, had avoided taking a public stand, with its CEO, Bob Chapek, explaining to employees in an e-mail March 7 that he did not want the company to become “a political football.”

Two days later, with pressure building for Disney to condemn the legislation, Chapek did so. He also announced that he had called DeSantis “to express our disappointment and concern that if the legislation becomes law, it could be used to unfairly target gay, lesbian, nonbinary and transgender kids and families.”

“The governor heard our concerns and agreed to meet with me and LGBTQ+ members of our senior team in Florida to discuss the ways to address them,” Chapek said.

That seemed to rile up DeSantis, leading to a tit for tat between his press secretary and a Disney spokesperson. When DeSantis signed the bill into law March 28, Disney renewed its criticism. “Our goal as a company is for this law to be repealed by the Legislature or struck down in the courts,” Disney said in a statement at the time, “and we remain committed to supporting the national and state organizations working to achieve that.”

Florida lawmakers then began threatening to revoke Disney World’s special tax district.

The Florida Legislature convened this week for a special session on congressional redistricting. DeSantis issued a proclamation Tuesday that allowed the Republican-controlled body to also take up the elimination of special districts that were created before 1968. Almost all were set up after that date, with Disney as a major exception.

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