TAKING THE MICKEY: Ron DeSantis's move to strip Disney of its special status may see company move
The battle between Florida Governor Ron DeSantis and Disney continues to heat up, with the Governor announcing that the park's "special status" could 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. The move could have major ramifications for Disney and its corporate operations and amongst other things its taxes.
The two giants have been clashing over Flordia's 'Don't Say Gay' bill, which Disney CEO Bob Chapek initially refused to comment on. After immense internal pressure, Chapek slammed the bill, but that move also backfired, leading Disney to be heavily criticized by DeSantis and Republicans. Disney heir Charlee Corra Disney came out as transgender shortly afterward, adding more weight to Disney's side of the argument.
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However, it appears DeSantis will have the last laugh. The ultra-conservative who is widely seen as a frontrunner for the GOP nomination for the 2024 Presidential Election, has decided to threaten the one thing that could really bring Disney down - its self-governing status.
What is Disney's self-governing status?
In 1976, Florida earmarked areas of the Orange and Osceola counties as the Reedy Creek Improvement District (RDIC). The district was a semi-private independently governed entity that Florida used to lure Disney there to build Disney World. Under the arrangement, Disney and other employers in the area provide and control fire protection, emergency medical services, and all other municipal services including its own police force.
More importantly, though, RDIC allows Disney to recycle the tax money it pays back into providing and maintaining all municipal facilities. It means taxpayers in the rest of Florida don't pay a single dollar towards the maintenance of facilities at the RDIC, only Disney does. Furthermore, it means Disney doesn't need extensive planning permission if it wants to build something new in the park. It can just do so.
The arrangement allows Disney to build and maintain Disney World the way it wants, with minimum government interference, an arrangement that DeSantis now wants to end. It could have massive ramifications for the company, which is apparently what DeSantis wants, but even the Governor might have not thought it through.
Will Disney leave Florida?
This question may seem like a no-brainer, but in reality, the answer is quite complex. It's true Disney can't just move Disney World to another state overnight, meaning it would be stuck in Florida no matter what for the time being. However, that would leave it with several challenges. For one, it would probably have to pay more in local and state taxes. As Dirk Libbey noted, it 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 in fees and taxes."
As a result, Disney could be less interested in investing money into Disney World. We've seen this play out before. In 2018, the company abandoned plans to build a fourth hotel at Disneyland in Anaheim, California, when the company could not come to an agreement with the city. If that happens in Florida, it would see a massive hit to the local economy, with losses to jobs and firms involved in construction and maintenance.
Given that Disney World is the largest and biggest draw in Orlando, ending RDIC could be a massive self-inflicted wound for DeSantis. It could also prompt Disney to begin looking elsewhere to move its park to. However it remains to be seen which states would welcome a similar arrangement. Even if any states do, leaving Florida would not be easy, given the millions Disney has spent on establishing Disney World and its entire ecosystem. Leaving Florida will certainly be a last-ditch effort, but shouldn't be discounted as an option the company will consider.