Disney's Reedy Creek Improvement District Cancelled by Florida Legislature
The Florida state legislature has voted to dissolve the Reedy Creek Improvement District, the area self-governed by Disney where Walt Disney World Resort sits. The bill was passed today by the Florida House of Representatives on a vote to 70-38, and passed the state's Senate on Wednesday. Florida governor Ron DeSantis pushed for the elimination of the Reedy Creek Improvement District in response to Disney's belated opposition to the so-called "Don't Say Gay Bill," which Florida passed earlier this year. If signed by DeSantis, Reedy Creek Improvement District will be dissolved on June 1, 2023.
Reedy Creek Improvement District was founded in 1967 and allowed Disney (who owns almost all the land in the district) to effectively self-manage a number of municipal functions. Through Reedy Creek Improvement District, Disney manages its own building permits, runs utilities, and handles public services such as road maintenance and trash collection. Reedy Creek has its own employees and issues its own bonds, which totals over $1 billion in debt.
The dissolution of Reedy Creek is seen as an escalation of a public feud between DeSantis and Disney, which is Florida's largest private employer. Earlier this year, Disney spoke out against the "Don't Say Gay Bill," which prohibits discussion of gender identity and sexual orientation in kindergarten through third grade. The "Don't Say Gay Bill" also requires that all discussion in later grades be "age appropriate," with parents having the power to sue school districts if they feel the law has been violated. Disney did not publicly come out against the bill until after its passage, with DeSantis countering that Florida would not be governed by Disney's "woke" agenda and taking aim at alleged "special privileges" that was passed by Florida lawmakers in the past.
The elimination of the Reedy Creek Improvement District means that Disney will no longer be responsible for managing the public services in the district, with Orange County and Osceola County assuming responsibility of services like zoning, utilities, and public services starting next June. This means that Disney can no longer build at Disney World without conforming to local regulations or receiving zoning variances from the counties. It also means that Orange County and Osceola County will have to assume all debt from Reedy Creek, which exceeds $1 billion. While Disney was effectively responsible for that debt and paid for it through ticket sales, it's unclear how Orange County and Osceola County would re-pay that debt. One estimate notes that individual households within those two counties could be saddled with extra tax bills exceeding $2,000 per house. Reedy Creek released a statement to its investors that Disney would continue to make payments on all bond debt while "exploring all options" involving the bill.
The dissolution of Reedy Creek Improvement District is expected to face legal challenges, with some experts citing the open retaliatory nature of the bill's passage, as well as an existing Florida statute that prevents the dissolution of an Improvement District without a vote by its residents.