Will Disney's loss of special tax district in Florida mean taxpayers are stuck with the bill?

Orange County Tax Collector Scott Randolph says the move by the Florida legislature will cost local taxpayers big bucks

Gov. Ron DeSantis signed a law Friday stripping Disney of its special self-governing tax district, known as the Reedy Creek Improvement District, surrounding Walt Disney World. 

The Republican-led legislature passed the bill earlier this week amid an intense political battle with Democrats, after Disney decried the state's new "Parental Rights in Education" law, which critics branded the "Don't Say Gay" bill.

But the political battle appears far from over. 

Opponents claim that removing the Reedy Creek municipality will leave local taxpayers on the hook for the district's outstanding debts and cost of upkeep when it goes into effect in June 2023 — to the tune of $163 million per year.

Disney

The Cinderella Castle at the Magic Kingdom at Walt Disney World, Monday, Aug. 30, 2021, in Lake Buena Vista, Fla. (AP Photo/John Raoux, File / AP Newsroom)

Orange County Tax Collector Scott Randolph, a Democrat and the former ranking member of the Florida House finance and tax committee, claims that if Reedy Creek ceases to exist, the residents of his county and neighboring Osceola will have to take on its tens of millions in bond payments and operational expenses currently paid by Disney, but will be left without the ability to collect revenue because the taxing authority will no longer exist.

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Randolph told FOX Business that could mean an increase in property taxes of 25% if Orange County has to absorb all of it. 

Florida state Rep. Randy Fine, the Republican who sponsored the legislation, told FOX Business that that argument is "just a scare tactic used by woke politicians."

Entrance of Walt Disney World in Orlando, Florida

Entrance of Walt Disney World in Orlando, Florida (iStock / iStock)

Fine acknowledges that the local entities where Reedy Creek lies will pick up the Reedy Creek's debt once the district is dissolved, but says those local governments can create Municipal Service Taxing Units (MSTU) that would also "pick up the revenue that would be going to pay for the debt." He insists that "There's no impact to taxpayers."

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Randolph argues that according to Florida statute, the local governments cannot impose MSTUs on Reedy Creek because it is an independent tax district. Therefore, he says, when that incorporated municipality dissolves, Disney would have no obligation to pay the $163 million each year. 

Fine says that's why the service taxing units are municipal, and therefore not something handled by the state. "Scott Randolph's job is to open envelopes and to take out checks," the lawmaker told FOX Business. "He probably should stick to that. He doesn't set tax policy."

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A view of Cinderella Castle from Seven Seas Lagoon in the Magic Kingdom at Walt Disney World, in Lake Buena Vista, Fla., Wednesday, Sept. 30, 2020.  (Joe Burbank/Orlando Sentinel via AP / AP Newsroom)

In reply, Randolph said, "Randy Fine doesn't understand basic math."

Raldolph says the bill against Disney was rushed through in 48 hours without legislators working out the details, but acknowledges that there is over a year for local municipalities to work out how they will manage the transition.

He added, "That's like putting a gun to my head for the next year."

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After signing the legislation into law, DeSantis' office issued a statement clarifying that "it is not the understanding or expectation for SB 4-C, abolishing independent special districts, to cause any tax increases for the residents of any area of Florida."

The statement continued, "In the near future, we will propose additional legislation to authorize additional special districts in a manner that ensure transparency and an even playing field under the law."