Florida Governor Ron DeSantis has insisted Disney will have to pay its own debts after the conglomerate claimed the state would have to foot its $2billion bill for bond tax if its special status is removed.
‘Disney will pay its debts,’ DeSantis told a townhall in Orlando with Fox News‘ ‘The Ingraham Angle’, garnering loud applause.
‘Disney will, for the first time, actually live under the same laws as everybody else in Florida. Imagine that.’
Host Laura Ingraham asked DeSantis if Disney was correct in claiming that there was a clause in their original contract that stipulates the state is responsible for its $2 billion bond debt if its special privilege’s are revoked.
‘There’s going to be additional legislative action. We’ve contemplated that,’ DeSantis said. ‘We know what we’re going to do. And so stay tuned. That will all be apparent. The bonds will be paid by Disney, they will be paying taxes, probably more taxes.’
‘No. Disney will pay its debts,’ DeSantis to Ingraham, garnering loud applause. ‘Disney will, for the first time, actually live under the same laws as everybody else in Florida. Imagine that.’
During a Thursday townhall in Orlando with Fox News’ ‘The Ingraham Angle’ DeSantis insisted that Disney is the one that will be paying up, not Florida residents’
The Reedy Creek district employs more than 400 people who enjoy benefits like health care and complimentary lifetime Disney passes, a value of up to $1,300 a year
‘They will follow the laws that every other person has to do, and they will no longer have the ability to run their own government, which they are the only corporation in all of Florida, the only entity in all of Florida, that has the ability to run their own government and do this,’ he added.
DeSantis urged Disney to stay out of politics and stop ‘injecting pan-sexualism into programming for young kids’ which got him even more loud cheers from audience members.
‘Get back to the mission. Do what you did great,’ he said. ‘That is why people love the company. And you’ve lost your way. Maybe this will be the wake-up call they need to get back on track.’
Earlier this week Disney hit back at DeSantis over his decision to strip the Reedy Creek Improvement District – the name of the private body that oversees Disney’s Orlando resort – of its privilege – over Disney’s opposition to his so-called ‘Don’t Say Gay’ bill.
Disney argued if the governor pushed ahead, his own constituents would be on the hook to pay their debt.
The company owes approximately $2billion in bond debt which it used to fund the expansion of Walt Disney World Resort. It claims that they have a clause in their contract that if the Reedy Creep Improvement District is rescinded, then the debt would be transferred to ‘general purpose government.’
A 1967 state law that established the Reedy Creek Improvement District on Disney property allowed the district the power to issue bonds and tax itself and in exchange the state pledged ‘it will not limit or alter the rights of the District…until all such bonds together with interest thereon…are fully met and discharged,’ the Miami Herald reported.
That would mean families from Orange and Osceola Counties would be on the hook for between $2,200 and $2,800 each, because the district would be absorbed into both areas.
When it comes to leaving local taxpayers to foot the bill for Disney’s bond tax, legal experts say it would be illegal to impose such a burden on residents of both counties, meaning there is no way forward for DeSantis’s proposals, Law & Crime reported.
Employees have been left in the dark as to what comes next for the district, says firefighter and union president Jon Shirey, who was reportedly the only one to address the issue directly on Wednesday
The Reedy Creek Improvement District board met on Wednesday for the first time since Gov. Ron DeSantis signed a law to dissolve it next year
DeSantis signed the law, which was fast-tracked through the state legislature, on Friday after the media conglomerate began speaking out against the state’s new ‘Don’t Say Gay’ law
DeSantis has previously been warned by multiple conservatives that Disney can sue him for violating its First Amendment right to protest against his so-called Don’t Say Gay bill, which triggered the ongoing clash.
They warn the entertainment giant’s suit has a good chance of succeeding, DeSantis faces two substantial obstacles.
Others say he’s playing a shrewd game that will fire-up his base and boost approval ratings with legislation that’ll ultimately prove ineffective.
A dead-in-the water law would further avoid jeopardizing Florida’s Disney operations. The firm is the state’s largest employer.
The issue wasn’t even on the agenda, but it was briefly mentioned during a discussion on solar panels.
District administrator John Classe said that a planned expansion of the solar energy program could be delayed due to financial challenges caused by the new law, according to WESH reporter Bob Hazen.
The district handles permits, trash collection and emergency services for the Orlando-area theme park.
It will be dissolved on June 1, 2023, according to a law fast-tracked by the state legislature and signed by DeSantis on Friday as the governor and the media conglomerate clashed over the ‘Don’t Say Gay’ law.
On Wednesday morning, Reedy Creek officials seemed just as confused as everyone else about what will come next, as it’s revealed that the district’s $2 billion bond debts could be transferred to Orange and Osceola counties, leaving taxpayers on the hook for as much as $2,800 per family of four.
The district’s 400 employees would also lose their jobs and benefits, which include lifetime complimentary Disney passes worth as much as $1,300 a year.
District supervisor Don Greer told Hazen: ‘If it’s going to be different than what we have, it will have to look like what it is. Because there’s just too much here to dump on anybody else.’
Disney came out against Florida Gov. Ron DeSantis’s so-called ‘Don’t Say Gay’ bill, whose official title is the Parental Rights in Education Bill, last month after being pressured by woke in-house diversity factions
Osceola and Orange counties would likely have to spread Disney’s tax liability among all taxpayers, which one tax collector estimated would raise taxes between $2,200 and $2,800 per family of four (Pictured: People visit Disney’s Magic Kingdom Park in Florida on Friday)
Photos from Wednesday show what looks like a regular meeting for the Reedy Creek Improvement District.
The district was created in 1967 by a Republican lawmaker. It’s governed by a board selected by Disney and other companies on the land.
Reedy Creek firefighter and union head Jon Shirey was the only one to tackle the issue head-on, according to Spectrum News 13 reporter Rebecca Turco.
‘What is that message?’ he asked, saying that employees of the district have been told to not speak to the media about the upcoming dissolution of the district.
Shirey has openly wondered what will become of the benefits enjoyed by the district’s 400 employees, including health insurance and complimentary lifetime Disney passes.
‘For our retirees who plan their lives and their finances around a benefit that they were promised for life, this is incredibly concerning,’ Shirey told the Orlando Sentinel.
‘There’s a lot of things that are still left to be answered to, like what is the governor’s plan or what is the Legislature’s plan and how they envision this going down,’ Shirey added.
‘And then also, we’re not really getting any information from the district about what their thoughts are and what their plans are going forward.’
An Orlando-based attorney alleged if Disney would have a ‘strong case’ if it were to pursue legal action against the state of Florida.
‘Once the government provides a benefit, that benefit can’t be taken away in a way that is unconstitutional,’ Lawrence Walters told WFTV. ‘In other words, the government cannot retaliate against the company in response to the exercise of the company’s First Amendment rights.’
However, most legal experts are raising objecting about the ‘complexity’ surrounding RCID’s bond debt and the ‘contractual impossibility of unwinding’ the district.
Supporters say the bill, which was signed into law in March, stops teachers from pushing inappropriate content on children, which they believe students may be too young to understand. Opponents say the bill is homophobic, and that the vagueness of its wording could see a teacher reported to authorities for something as minor as mentioning their same-sex partner in class
State law stipulates that Florida taxpayers must be treated equally across all of the state’s counties, unless there is a special taxing district ‘specifically authorizing’ differential treatment. However, DeSantis on Friday abolished Reedy Creek Improvement District (RCID), the special taxing district operating Disney’s land in Osceola and Orange Counties, seemingly leaving the counties responsible for the district’s nearly $2billion bond debt
‘Florida simply cannot promise to prospective bondholders that it won’t interfere with Reedy Creek, and then dissolve Reedy Creek,’ attorney Jacob Schumer penned in an article for Bloomberg Tax. ‘If Reedy Creek is ever dissolved, it would be a monumental and complicated enterprise even on a years-long timeline.’
Walt Disney’s ‘Magic Kingdom’: How 1967 law allowed the company to govern its vast Florida domain
The Reedy Creek Improvement District, a semi-private, special-purpose government, is controlled by Disney and spans 39 square miles.
It was created in 1967 when then-Florida Gov. Claude Kirk, a Republican, signed into law the Reedy Creek Improvement Act authorizing it to regulate land use, enforce building codes, treat wastewater, control drainage, maintain utilities and provide fire protection at Disney World.
The district is governed a Board of Supervisors that is selected by its 19 landowners, the biggest and most influential of them being Disney World.
The district has the authority to tax the land, and use the revenue to provide essential public services and operate and maintain all public roads and bridges.
Such private governments aren’t uncommon in Florida, which has more than 600 community development districts that manage and pay for infrastructure in new communities.
If the 1967 is repealed by GOP lawmakers, Disney World’s property will fall under the control of Orange and Osceola counties.
He noted how RCID was structured to operate like a local government and, like many local municipalities, borrows money for infrastructure development by issuing bonds.
When Florida created the district and granted RCID its powers, including issuing bonds, the state made a pledge to bondholders that it would ‘not limit or alter the rights of the District 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 herein … until all such bonds together with interest thereon, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged.’
‘Dissolving Reedy Creek ‘limited’ and ‘altered’ its ability to improve and maintain its project and collect its various charges and taxes, and thus Florida would be violating its pledge to bondholders,’ Schumer argued.
He also alleged dissolving RCID would violate contract clauses within the Florida and U.S. constitutions.
The attorney claimed there is ‘even greater protection’ within the Florida Constitution from blocking the state from breaching its contractual obligations to maintain the authorization for RCID’s existence.
‘With this law, the state of Florida has eliminated the government entity that backed the various bonds while violating its own explicit promise not to do so. It is hard to imagine a way that the state could successfully argue that this did not violate its own contractual obligations or unconstitutionally impair the contract between Reedy Creek and the bondholders,’ he wrote.
‘Florida could theoretically get rid of some of these contractual issues by writing a giant check to prepay or ‘redeem’ the bonds, but that’s prevented by at least one of the outstanding bonds.’
Schumer also noted how RCID operates with a nine-figure annual expenditures budget so, even ignoring its debts, the district has a ‘plethora of other contracts’ that would have to be assigned and divided between Osceola and Orange counties.
Ultimately, he concluded that the dissolution of RCID ‘will have to wait until all of its bonds are paid in full.’
RCID issued a statement to their bondholders citing the same obligation of the state to ‘not limit or alter the rights’ of RCID to fulfill its bond obligations and ‘not in any way impair the rights or remedies of the [bond] holders’ until the bonds and associated interest, costs, and expenses are fully paid.
‘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,’ the statement concluded.
DeSantis officially stripped Disney of its 55-year-old special privileges that effectively allowed it to self-govern.
DeSantis’ toxic war with the firm started when it blasted the so-called ‘Don’t Say Gay’ bill, whose official title is the Parental Rights in Education Bill, barring instruction on sexual orientation and gender identity in pre-school through to third grade.
The company said in March it would suspend political donations in the state and added it would in turn support organizations working to oppose what is officially called the Parental Rights in Education bill.
But DeSantis and his fellow Republicans lashed out at the Orlando resort – defending the law – before moving to strip it of its special privileges.
At the bill signing ceremony in South Florida on Friday, DeSantis said Disney lied about the content of the education law but he viewed the company’s vow to fight the law as unacceptable.
Supporters say the bill, which was signed into law in March, stops teachers from pushing inappropriate content on children, which they believe students may be too young to understand.
Opponents say the bill is homophobic, and that the vagueness of its wording could see a teacher reported to authorities for something as minor as mentioning their same-sex partner in class.
Disney initially stayed quiet on the bill, but the firm – which has long had a good track record on supporting its LGBT staff – is said to have waded into the issue after being pressured by woke in-house diversity factions now said to exert growing influence over bosses there.
CEO Bob Chapek later spoke out after walkouts by a small number of Disney staffers – and angered DeSantis by openly suggesting that his firm would apply pressure on lawmakers.
After blasting the bill, he said: ‘As I wrote to our employees earlier this week, we are committed to supporting community organizations like these so they are equipped to take on these fights.
‘Meanwhile, we are also reassessing our approach to advocacy, including political giving in Florida and beyond.’
The controversy has hit Disney’s share price hard too, as parents who back the bill or who were angered at the firm’s sudden outspoken stance vowed to boycott it.
Stocks have tanked by around a third in recent weeks, and now sit at just $115.77 per share.