Although Florida Gov. Ron DeSantis has signed a bill to strip the Walt Disney Co. of its special tax status, in retaliation for Disney’s opposition to legislation that bans discussion of gender identity in kindergarten through third grade, he has left intact $578 million in tax credits that the company can use to lower its state income taxes through 2040, Accounting Today reported.
On April 22, DeSantis signed the bill that will end Disney’s Reedy Creek Improvement District in the Orlando area, a special tax district that Disney has operated for more than 50 years. He did it to punish the company for speaking out against the legislation, referred to by its opponents as the “Don’t Say Gay" bill--they say that it will harm members of the LGBTQ+ community. But DeSantis is leaving in place Disney's incentive tax credits, which are intended to lure business to the state and are available to other companies.
Accounting Today reported that, in its application for the incentives, Disney stated that it plans to move as many as 2,000 staffers, making an average of $120,000 a year, to a new corporate campus in the state. That campus is set to be built in Lake Nona, about 20 miles southeast of downtown Orlando. The company plans to invest $864 million in the relocation, including office construction, supplies and software improvements. Disney considered other states, including California, New York and Connecticut. The incentives were an “integral part of the overall decision in determining the location of this project,” the company said in its application.
Meanwhile, the legislation that DeSantis signed on April 22 has left some key questions unanswered, according to Accounting Today. One of them is: What will happen to the $1 billion in bonds backed by the district and who would take care of the services the company currently provides? Accounting Today cited Fitch Ratings, which stated that if the special district is terminated, Florida taxpayers would likely bear the cost, and that Orange and Osceola counties would likely assume title to all municipal property and debt of the district, which provides power, water and other services to the Walt Disney World resort complex.
At a signing event for the bil on Friday, DeSantis said that residents shouldn’t be concerned about the services provided by the improvement district. “We’re going to take care of all that,” he said. “Don’t worry. We have everything thought out.”
But Orange County Mayor Jerry Demings said that the financial impact on his county could be "catastrophic," according to Florida Today, which quoted Orange County Tax Collector Scott Randolph saying that it could mean a 20 to 25 percent increase in property taxes for Orange county residents.
Accounting Today quoted Anna Eskamani, a Democratic state representative, who said that not every business can qualify for the tax credits that Florida offered Disney because these credits have high requirements for investment and job creation. It also reported that Democratic governors of other states are seizing on the irony of DeSantis targeting Disney over its Reedy District perks, while at the same time trying to lure the company to bring more jobs to the state.