End of Reedy Creek: Disney won’t pay more taxes, but you will

ORANGE COUNTY, Fla. — One of the biggest myths circulating on the internet is that the end of Reedy Creek will finally force Disney to pay its fair share of taxes, boosting the economies of Florida and the counties its resorts are located in.

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Let’s dispel that rumor right now: not only is it wrong, it’s the opposite that will take effect.

This much is true: the Reedy Creek Improvement District is an extension of Disney that shields the company from oversight others have. The theme park operator taxes itself and gives itself permission to build whatever, wherever so long as it follows building codes and other state and federal laws.

READ: ‘Political retribution’: Demings denounces decision to strip Disney’s self-governing power

What Reedy Creek isn’t is a replacement for the counties it exists in. Disney still pays the same property taxes levied by the government and the school district that every other landowner pays. Orange County, for example, collected $40 million from the House of Mouse in 2021, Tax Collector Scott Randolph (D) said.

So, how does Reedy Creek operate its own fire and sewer departments? The special tax district status allows Disney to levy an additional tax on itself to pay for those services. The tax, amounting to $105 million per year, is illegal anywhere else in the county, along with the additional $58 million per year the company taxes itself to pay off Reedy Creek’s bond debt.

When the district is dismantled on June 1, 2023, Orange County will begin paying for those services and paying off the debt, without that special status in place.

Read: Court battle? Negotiation? What’s next for Reedy Creek

“The moment that Reedy Creek doesn’t exist is the moment that that those taxes don’t exist,” Randolph said. “Orange County can’t just slap a new taxing district onto that area and recoup the money that was lost.”

Effectively, Disney’s loss of control also hands it a $163 million per year tax break. If the entire state of Florida was responsible for covering the hole, each taxpayer would have to cough up roughly $7.50.

However, this burden will not be shared equally. Despite zero debate or public comment, and the near-total opposition of Central Florida’s delegation to this maneuver, Orange and Osceola County taxpayers will shoulder the hit alone, leaving both counties staring at financial ruin.

Read: Court battle? Negotiation? What’s next for Reedy Creek

Salvaging the budgets won’t be pretty. State law prevents the counties from raising sales taxes or impact fees to cover the costs. They also must tax all areas of the county equally, meaning whatever they enact must apply to everyone.

That leaves one avenue: property taxes, of which Orange County collects approximately $600 million per year right now.

“I don’t see how Orange County doesn’t raise property taxes by 20% to 25%,” Randolph said. “That’s what [the county] would probably have to do to cover this financial situation.”

Read: What would dissolving Disney’s Reedy Creek mean for local taxpayers?

Normally, such a move would be a political poison pill in an election year and go against the typical Republican promise to never raise taxes.

Most people expect the legislature to backtrack on their plans in January, paring down some of Disney’s unnecessary powers while maintaining Reedy Creek’s taxing abilities, which would solve legitimately held complaints about the district’s broad abilities while preventing the worst effects of this past week.

However, Randolph said some damage was already done. For one, county and Disney staff will spend the next nine months or more meeting to discuss how to dissolve the district and transfer responsibility to the counties.

Read: Disney’s debt is about to be Central Florida taxpayers’ problem

The second effect: making businesses think twice about moving jobs to Florida, knowing the state could change the rules overnight if an executive has a different opinion than a politician.

“They’re dissolving something the size of the city of Orlando in 72 hours,” Randolph said. “This is not the way to run a state.”

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