On Friday, April 22, Florida Governor Ron DeSantis signed a bill that will officially dissolve the Reedy Creek Improvement District on June 1, 2023. The signing was just another punch thrown in the fight between the state of Florida and the House of Mouse. It all began when Disney spoke out against Florida’s Parental Rights in Education bill. Governor DeSantis signed the Parental Rights bill into law despite Disney’s objections, and Disney CEO Bob Chapek said that the company would work to see the bill repealed. Not long after, Florida Republicans began working to end the Reedy Creek Improvement Act of 1967.
Even though Governor DeSantis signed the bill, there is still a lot of debate about whether it will actually be enacted, or if it is even legal. One of the biggest hurdles is what will happen to Reedy Creek’s debt. Reedy Creek typically operates at a loss every year and currently has over $1 billion in debt. Disney has said that if Governor DeSantis wants to dissolve Reedy Creek, then the state will be responsible for covering that debt. DeSantis says that the state will not be paying.
Unfortunately, for Governor DeSantis, the law may not be on his side. However, he has assured his supporters — and Florida taxpayers — that they will not be responsible for Disney’s debt. DeSantis seems confident in that statement, but right now, he hasn’t given any plan that would make it so that the state doesn’t get stuck with the bill. According to a report from Politico:
A plan for how the state will tackle Disney’s Reedy Creek Improvement District, which gives the California-based company self-governing power over its amusement park property in Central Florida, is expected to be “shared in the next few weeks,” according to DeSantis officials. Yet Reedy Creek is contending that the new state law targeting Disney conflicts with the state’s original agreement, leaving at stake some $1 billion in outstanding bond debt and putting the economic future of the special district in a dire position, according to a new advisory from Fitch Ratings on Thursday.
Florida may have a tough time getting out of paying for Disney’s debt if they are dead set on dissolving Reedy Creek. In 2018, Disney sold utility bonds that cannot be redeemed until 2029. Dissolving Reedy Creek would violate those bonds, and the only legal way, at this point, Florida could end those bonds is to pay Disney’s debt that the bondholders currently have.
This is just the beginning of a possibly long fight between Florida and one of its largest employers. Experts have said that Florida has put itself in the position to be sued by Disney. Disney has not yet said if they plan on suing the state for its retaliatory action of dissolving Reedy Creek.