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Florida Governor DeSantis threatens Disney’s special status in Florida

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(Bloomberg) — Florida Governor Ron DeSantis has escalated a dispute with Walt Disney Co. by asking the state legislature to consider terminating special privileges the company currently enjoys in the Sunshine State.

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The Legislature, which is meeting in special session to debate congressional redistricting maps, “will consider the termination of all special districts that were enacted in Florida prior to 1968, and that includes the Reedy Creek Improvement District,” said said DeSantis on Tuesday. Reedy Creek was created in 1967 by special act of the Legislature to allow Disney to perform certain municipal functions on its own.

The announcement is the first indication that a dispute over school education regarding gender identity and sexual orientation could have consequences for the entertainment giant. Dissolving the district could impact Disney’s ability to borrow from the $4 trillion public and local debt market. The Reedy Creek Improvement District currently has about $1 billion in municipal bonds outstanding, according to data compiled by Bloomberg.

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This would eliminate the company’s access to cheaper, tax-exempt financing through the Special District, “potentially costing Disney and other landowners in the District more money to finance various projects,” said Michael Rinaldi, manager. U.S. local government ratings from Fitch Ratings in an email. statement.

Rinaldi said it was unclear what would happen to those bonds if the district was eliminated and that it was “difficult to estimate” what a dissolution would cost Disney over time. Disney did not immediately respond to a request for comment.

DeSantis slammed the company for opposing a bill he signed into law last month that limits teaching about gender identity and sexual orientation to kindergarten through third grade. Disney, one of Florida’s largest employers, said the bill “should never have passed and should never have been enacted” and that it would work for it to be repealed by the Legislature or invalidated by the courts.

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Shares of Disney climbed 3.6% to $132.33 at 1:26 p.m. in New York.

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DeSantis said in a proclamation he signed on Tuesday that there was a need to review independent special districts to ensure “they are properly serving the public interest.” The governor also said lawmakers could review exemptions for theme park operators from a law passed last year that prohibits social media companies from banning political candidates from their networks.

State Representative Carlos Guillermo Smith, a Democrat, said he visited the Reedy Creek District last week and officials received no communication from DeSantis or Republican lawmakers.

“This is 100% political retribution and punishment,” he wrote on Twitter. “We don’t know what impact this will have on local taxpayers, workers and small businesses. Republicans don’t care. »

State Rep. Allison Tant, a Democrat, said Disney was “under attack.”

State Rep. Randy Fine, a Republican, said he introduced a bill that would eliminate the Reedy Creek Improvement District. A bill states that any special district established by special law prior to the ratification of Florida’s constitution in 1968 that has not been “reinstated, re-ratified, or otherwise reconstituted” would be dissolved effective June 1, 2023.

“Disney is a guest in the state of Florida,” Fine wrote in a Facebook post. “Today we remind them of that fact.”