DeSantis Plan To Punish Disney By Sticking Floridians With $2B Tax Bill Even Stupider Than You Think
We regret to inform you that Ron DeSantis may have fucked up just a tiny. Again.
Yeah, don't faint.
Remember when Disney offered that tepid criticism of Florida's vile "Don't Say Gay" law, and Gov. DeSantis freaked the fuck out, because HOW VERY DARE THEY? So Republicans raced into their No Groomers Clubhouse to write up a bill abolishing the Reedy Creek Improvement District, a special tax entity that the state granted Disney in 1967 to entice it to build a theme park in the swampland of Orlando. Approximately 10 minutes later, the Gippers emerged with a bill to make Mickey Mouse pay his fair share in taxes, at least according to DeSantis.
“If Disney wants to pick a fight, they chose the wrong guy,” he told supporters. “I will not allow a woke corporation based in California to run our state. Disney has gotten away with special deals from the state of Florida for way too long.”
Turns out ... not so much. And if those brain geniuses had taken five minutes to investigate the issue instead of crapping out a bill, signing it inside 10 days, and clapping for themselves like a pack of trained seals at Sea World, they might have spotted the problems with their plan to stick it to the state's largest employer to win a round in the never ending culture war.
Because Reedy Creek gives Disney self-governing status and also responsibility over its own municipal utilities. In addition to paying taxes to Orange and Osceola Counties, Disney funds water, sewer, and fire service to the tune of $105 million per year, plus $14 million which it currently pays to the local sheriff's office — money that will have to come out of local budgets once Reedy Creek is abolished. There's also the minor matter of Reedy Creek's bond debt, which currently tops $1 billion, with debt service of $58 million annually. When and if the improvement district magically vanishes in June of 2023, all of that is going to land in the laps of Orange and Osceola counties, which certainly cannot afford it. By some estimates, this would result in an extra $2,200 in taxes for the average taxpayer in those counties until the bond is paid off. And not for nothing, but Florida law says special districts can only be dissolved if the majority of property owners in the district — i.e. Mickey, Minnie, Goofy, and Donald — vote for it, which is not bloody likely.
There are also one or two other tiny problems, as Florida attorney Jacob Schumer explained in a recent Bloomberg Tax article that was expanded on by the Miami Herald. To wit, when it approved the special tax district, the state made promises to the holders of any bond issued under it.
(1) that it will not limit or alter the rights of the District (a) to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees, tolls, fares and other charges provided for in the Reedy Creek Act, and (b) to fulfill the terms of any agreement made with the holders of any bonds or other obligations of the District; and (
2) that it will not in any way impair the rights or remedies of the holders, and that it will not modify in any way the exemption from taxation provided in the Reedy Creek Act, until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged.
In plain English, Florida said that it would pay off the bonds before it started screwing with the bondholders' ability to get paid — something which plainly has not happened here. Because Disney is allowed to collect much higher property taxes than regular counties, and because it is a multinational behemoth, it can easily make the payments. Not so for Orange and Osceola counties. And, as Schumer explains, there are some circumstances in which states can abrogate contracts, but this probably isn't one of them.
Disney's lawyers also figured this out, quietly putting out a statement, first flagged by NBC affiliate WESH, indicating that the company intends to proceed with business as usual and wait for DeSantis's bizarre interpretive dance to play itself out.
In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties.
Translation: When you finish waggling your limp little peener at a child's cartoon, everything will proceed status quo ante. Now if you'll excuse us, we have to go back to printing money, you pathetic jackass.
But DeSantis has an answer for that one ... sort of.
“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,” he said Friday.
By Monday, reality started to break through, so DeSantis called a presser to assure the public that all was going according to plan.
“Some people are trying to say somehow that they would get a tax break out of not having their special district. Trust me. Under no circumstances will Disney not pay its fair share of taxes," he said.
Just trust him. It will all work out. And by work out, we mean that DeSantis will get his ass handed to him in court, but declare flawless victory in one of the dumber battles in the idiotic culture wars that now constitute our main mode of political discourse.
Man, if you'd told us five years ago that we'd be siding with the Mouse ...
[Bloomberg Tax / Miami Herald]
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Liz Dye lives in Baltimore with her wonderful husband and a houseful of teenagers. When she isn't being mad about a thing on the internet, she's hiding in plain sight in the carpool line. She's the one wearing yoga pants glaring at her phone.
