DeSantis’s bill changing Disney’s special district keeps tax benefits intact

Gov. Ron DeSantis’ plan to take over Disney’s special taxing district passed its first committee on Wednesday but not before Democrats questioned why the company wasn’t hit harder.

The company will lose control over the Reedy Creek Improvement District, a special favor given to Walt Disney World by the state in the 1960s. Instead of Disney choosing the five members of the board, which acts as a county government, the five will be chosen by DeSantis.

But the new improvement district will still have the same tax benefits it had before, such as the ability to issue tax-exempt bonds and other measures that have saved the company millions of dollars.

“Disney still maintains the same perks they did before,” Rep. Anna Eskamani, D-Orlando, said Wednesday.

READ MORE: DeSantis slams special legislation for Disney. But his staff helped write it

Despite the questions, the bill passed its first committee with bipartisan support. Eskamani joined two other Democratic lawmakers in voting against it.

House Bill 9B heads to the floor of the Florida House on Thursday and is expected to pass the Senate on Friday before heading to DeSantis’ desk.

The bill is a legislative do-over

The measure reverses a bill signed by DeSantis last year, after he targeted Disney over its opposition to Florida’s Parental Rights in Education legislation, called the “don’t say gay” bill by critics.

DeSantis vowed to dissolve the district, and that’s what last year’s bill tried to do by June 1 of this year. But that legislation did not say how the state would handle Disney’s nearly $1 billion in bond debt, which would fall on the residents of Orange and Osceola counties if Disney’s ability to tax itself was removed from law.

This year’s bill renames the district the Central Florida Tourism Oversight District and gives the governor the ability to appoint the board’s five members. The members could not have recently worked for a theme park and must be confirmed by the Florida Senate.

The bill sponsor, Rep. Fred Hawkins, R-St. Cloud, called it “fair.” He said that on top of losing control over the district, the district was also losing the ability to build a stadium, a nuclear power plant or an airport, and it was being subjected to additional reporting requirements.

Tax benefits stay intact

Because the district is being left intact, however, it will keep its tax benefits, including the tax-exempt status of the district’s property.

When Walt Disney World wanted to build two parking garages a decade ago, for example, Reedy Creek picked up the estimated $85 million tab, the Orlando Sentinel reported at the time. Because Reedy Creek, not Disney, owns the garages, they could be built with tax-exempt bonds, and the materials purchased without paying sales taxes.

Eskamani compared the new arrangement to placing Disney in a low-security prison, “where they can pretty much do what they want to do, but if they go off course, they’ll be punished.”

She and other Democrats filed amendments that would have required board members to live in the Orlando area, or would have prohibited board members from being campaign donors to the governor. The amendments were voted down. DeSantis has appointed more political donors to various positions than his predecessor, Rick Scott.

“Our governors shouldn’t be appointing people that donate to them, no matter who that governor is,” said Rep. Rita Harris, D-Orlando.

Disney’s bond debt will stay with the district, a move that satisfied one ratings agency.

“The bill appears to address key uncertainties created following last year’s dissolution legislation,” Michael Rinaldi, head of local government ratings for Fitch Ratings, said in a statement this week.

The bill also had the support of the district’s firefighters and other first responders.

“This has been a long time coming,” Reedy Creek Professional Firefighters President Jon Shirey told lawmakers.

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