Florida lawmakers to hold special session to consider state-run board for Disney tax district

The corporation’s Reedy Creek district is one of several items legislators are expected to discuss in special session.
The headquarters of Walt Disney World's Reedy Creek Improvement District in Lake Buena Vista, Wednesday, January 25, 2023.
The headquarters of Walt Disney World's Reedy Creek Improvement District in Lake Buena Vista, Wednesday, January 25, 2023. [ JOE BURBANK | Orlando Sentinel ]
Published Feb. 3|Updated Feb. 4

TALLAHASSEE — After months of intrigue, Florida lawmakers will meet in special session next week to consider a plan to reverse their decision to dissolve Walt Disney World’s special taxing district and instead approve a state board to oversee it.

If approved, the dispute will resolve an issue that has left the state vulnerable to a lawsuit and Disney at risk of losing the special governing privileges it has held for 55 years.

According to memos from Senate President Kathleen Passidomo and House Speaker Paul Renner on Friday, lawmakers will convene in special session starting Monday that will address the Disney issue as well as other issues relating to fixing problems with state laws relating to relocating migrants, college athletes, and clarifying the role of the state in prosecuting election fraud. Lawmakers will also address hurricane recovery and two local water control districts.

Related: State lawmakers consider giving DeSantis OK to transport migrants from anywhere in US

It is unclear how a state-directed oversight board would work and what kind of financial control it would have over the Disney-run operation. The proposed legislation had not been released by 7 p.m. on Friday.

The district has served as the governing body for the Walt Disney World Resort since it was created by state lawmakers in 1967. It has the ability to tax itself at a rate that is higher than allowed by county and cities in the region. and it has financed its debt burden and maintained high standards for services on property that extends over two counties.

Dealing with Reedy Creek’s $1 billion debt

DeSantis on Thursday foreshadowed that lawmakers would convene next week to “make sure that Disney doesn’t have self-governing status anymore.” Lawmakers last year passed a law dissolving the Reedy Creek Improvement District effective in June 2023. The vote was largely along party lines.

But for months DeSantis refused to reveal details about how the state would handle Disney’s nearly $1 billion in bond debt, which will fall on the residents of Orange and Osceola counties if Disney’s ability to tax itself remains removed from law. The governor has only said the burden would not fall on taxpayers.

DeSantis said last April, after he signed the law, that the plan of “abolishing” the district was not intended “to cause any tax increases for the residents of any area of Florida.”

Lawmakers meet in regular session in March but, by isolating the Disney legislation to a special session next week, the governor can avoid having lawmakers use a vote on the vulnerable issue as leverage over other issues, such as the budget or votes on other controversial subjects.

Rep. Anna Eskmani, an Orlando Democrat, said the goal of the special session “is to avoid as much public attention as possible while also restarting Disney political contributions before session starts and ensuring Disney is silenced as more attacks are made towards the LGBTQ+ community.”

“Based on what we heard about this bill, Disney will likely get what they want but a governor-appointed board will ensure the stifling of their First Amendment rights,” she said.

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Related: Florida's Disney district crackdown may violate First Amendment, legal experts say

She added that Republicans had made clear that if Disney conformed to legislative demands, “things would ‘go back to normal.’”

That translates to “never challenge the Legislature” and “they would once more benefit from the Reedy Creek structure,’’ she said.

DeSantis, Disney clashed over ‘don’t say gay’ bill

The controversy was spawned last spring, when Disney publicly opposed Florida’s Parental Rights in Education legislation, known as the “don’t say gay” bill by critics. It prohibited discussions of sexual orientation and gender identity in grades kindergarten to third grade, and in older grades when deemed “not age-appropriate.”

When the company did not publicly lobby against the measure, some employees marched out of Disney’s California headquarters in protest, and others urged executives to join with other corporations and condemn DeSantis, who signed the law.

After Disney published a statement in March demanding that the law be repealed, DeSantis retaliated by expanding the agenda of a special session on redistricting to include dissolving Disney’s special taxing district.

An obscure provision in state law says the state could not dissolve the district until its bond debt was paid off. Disney then quietly sent a note to its investors to show that it was confident the Legislature’s attempt to dissolve the special taxing district violated the “pledge” the state made when it enacted the district in 1967, and therefore was not legal.

The result, Reedy Creek told its investors, is that it would continue to go about business as usual. The statement is the only public statement Disney has supplied.

After the governor signed the Reedy Creek repeal into law in April, his office released a statement indicating that more details are forthcoming.

“In the near future, we will propose additional legislation to authorize additional special districts in a manner that ensures transparency and an even playing field under the law,” the statement read.

However, for nine months, both the governor and Legislature have been silent about proposing any resolutions.

Rep. Randy Fine, R-Palm Bay, said in December that lawmakers were considering options to allow new taxing districts take over the bond debt and taxing authority now held by Reedy Creek. Another option under consideration was to reconstitute Reedy Creek but remove its unique power to take over private property under eminent domain laws and to issue government-backed bonds.

Three residents of Orlando, who live near the Walt Disney World theme park and resort, sued the state after it passed the law at DeSantis’ urging. They allege that the state’s actions will saddle them and other taxpayers with Disney’s bond debt.

Disney’s decision to replace chief executive Bob Chapek with Bob Iger in November “was a good sign,” that the company was willing to modify its position, Fine said.

Sen. Jason Pizzo, D-Miami Beach, said the governor’s reversal on the issue is a signal that the corporate donors who are backing DeSantis think he went too far.

For example, Ken Griffin — the billionaire investor and DeSantis megadonor told the annual Milken Institute Global Conference last year: “I don’t appreciate Gov. DeSantis going after Disney’s tax status. It can be portrayed, or feel, or look like retaliation.”

“He overstepped,” Pizzo said. “A lot of his large wealthy donors liked DeSantis over the past couple of years because they thought he was malleable, and has no business experience and he was someone they could mold into their own form — then he goes and picks on the biggest corporate partner in the state.”