The battle between Florida Governor Ron DeSantis and Disney continues to escalate, with the governor announcing that the park’s “special status” may soon be a thing of the past. On April 19, DeSantis said lawmakers would debate the Orlando-based park’s self-governing status in an upcoming special session. This decision could have major ramifications for Disney and its corporate operations and, among other things, its taxes.
The two giants clashed over Flordia’s “Don’t Say Gay” bill, which Disney CEO Bob Chapek initially declined to comment on. After immense internal pressure, Chapek slammed the bill, but that move also backfired, leading Disney to come under heavy criticism from DeSantis and the Republicans. Disney heiress Charlee Corra Disney came out as transgender soon after, adding more weight to Disney’s argument.
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However, it looks like DeSantis will have the final say. The ultra-conservative, who is widely seen as a frontrunner for the GOP nomination in the 2024 presidential election, has decided to threaten the only thing that could really bring down Disney: its self-government status.
What is Disney’s self-governing status?
In 1976, Florida designated areas of Orange and Osceola counties as Reedy Creek Improvement District (RDCI). The district was an independently governed, semi-private entity that Florida used to lure Disney there to build Disney World. Under this agreement, Disney and other area employers provide and monitor fire protection, emergency medical services and all other municipal services, including its own police force.
More importantly, however, RDIC allows Disney to recycle the tax money it reimburses to provide and maintain all municipal facilities. This means taxpayers in the rest of Florida don’t pay a single dollar to maintain RDIC facilities, only Disney does. Plus, it means Disney doesn’t need an extended building permit if it wants to build anything new in the park. He can just do it.
The arrangement allows Disney to build and maintain Disney World as it sees fit, with minimal government interference, an arrangement DeSantis now wants to end. It could have massive ramifications for the company, which is apparently what DeSantis wants, but even the Governor may not have thought about it.
Will Disney leave Florida?
This question may seem obvious, but in reality the answer is quite complex. It’s true that Disney can’t just move Disney World to another state overnight, which means it would be stuck in Florida no matter what for now. However, this would leave him with several challenges. For one thing, he would probably have to pay more state and local taxes. Like Dirk Libbey notedit also means “if Disney wanted to build another resort hotel or even a fifth gate, it would have to deal with a lot more government bureaucracy and pay a lot more fees and taxes.”
As a result, Disney might be less interested in investing money in Disney World. We have seen this play out before. In 2018, the abandoned company plans build a fourth hotel at Disneyland in Anaheim, California, when the company failed to come to an agreement with the city. If this happened in Florida, it would be a huge blow to the local economy, with job losses and businesses involved in construction and maintenance.
Given that Disney World is Orlando’s biggest and biggest draw, ending RDIC could be a massive self-inflicted wound for DeSantis. It could also prompt Disney to start looking elsewhere to move its park. However, it remains to be seen which states would welcome a similar arrangement. Even if every state does, leaving Florida wouldn’t be easy, considering the millions Disney has spent establishing Disney World and its entire ecosystem. Leaving Florida will certainly be a last ditch effort, but should not be considered an option the company will consider.