Legislators in Florida may decide to overturn the state’s decision to revoke Disney’s (DIS) special status as a self-governing entity. State politicians are reportedly working on a deal that would “enable Disney to retain the partnership essentially in place with a few adjustments,” according to a Financial Times story. According to the article, Bob Iger’s appointment as CEO again is boosting support for a solution. The bill’s author, Republican congressman Randy Fine, told the Financial Times that Chapek’s dismissal indicates “something will get straightened out.”
When you don’t have to justify the previous policy, changing policy is simpler, according to Fine. Chapek made a mistake, but Bob Iger is not required to take responsibility for it. Disney’s special district classification would be revoked as of June 2023 thanks to a bill that was signed into law by Republican Florida Governor Ron DeSantis in late April.
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Disney’s response to the so-called “Don’t Say Gay” bill, which states that “Classroom instruction by school personnel or third parties on sexual orientation or gender identity may not occur in kindergarten through grade three or in a manner that is not aged appropriate or developmentally appropriate for students in accordance with state standards,” was largely the driving force behind the decision. In an unsuccessful attempt to amend the legislation at the time, then-CEO Bob Chapek chose to work behind the scenes rather than speak publicly about it.
The executive later changed his mind in response to strong criticism, officially rejecting the behavior on March 9 during the company’s annual shareholder meeting in addition to issuing an official apology to the staff. In addition to paying property taxes to the counties of Orange and Osceola, Disney also pays taxes to Reedy Creek directly. The district then utilizes that money to pay for different operations and projects at Disney’s theme parks, such as maintaining the infrastructure.
This implies that Disney has complete control of all of its services and infrastructure, establishes construction rules, runs its own police and fire agencies, and is free to grow at any time without interference from the local or state governments. The agreement also has certain tax benefits because Reedy Creek is able to fund some projects with tax-free municipal bonds.
According to Disney historian Richard Foglesong, author of the book “Married to the Mouse: Walt Disney World and Orlando,” “I call it the Vatican with mouse ears because it’s basically the same kind of authority that the Vatican has in Rome in the state of Italy.” Foglesong previously told Yahoo Finance.
The DeSantis plan would deprive Disney of this enormous power and flexibility while also raising questions about Reedy Creek’s $997 million bond obligation and around $163 million in yearly tax payments. The expense of the numerous services that Disney had previously paid for through Reedy Creek would have to be borne by the residents of the neighboring counties, who could be subject to those payments.
It is not yet known what the “happiest location on earth’s” long-term financial effects might be if the bill is not changed. Iger addressed the special tax district mess in a speech to Disney employees on Monday, his first to them since resuming his position as CEO. He reportedly said to staff members during the meeting: “The state of Florida has been important to us for a long time, and we have been extremely important to the state of Florida. I was unhappy to see us dragged into that battle, and I have no idea exactly what its ramifications are.”
In response to Iger’s remarks, DeSantis said to Tucker Carlson on Tuesday: “We didn’t drag them in… They entered on their own, attacked the bill, and threatened to have it overturned. Parents have these rights. They are to blame for this. Yahoo Finance requested a statement from DeSantis’ office but has not yet received a response. The governor “does not make U-turns,” a spokeswoman told NBC News in a statement.
According to the governor’s office, “the governor was right to promote reducing the extraordinary benefit given to one firm through the Reedy Creek Improvement District.” “In Florida, businesses will compete on a fair playing field, and the state is under no obligation to give one corporation special treatment. The Florida taxpayers will not be responsible for Disney’s obligations. A strategy is being developed and will be presented soon.
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