Why Disney World has a self-governing district — and why DeSantis wants to end it

GAINESVILLE, Fla. — Gov. Ron DeSantis’ battle with the Walt Disney Co. intensified after he pushed state lawmakers to strip the California-based entertainment giant of a special status that allows the company to essentially operate its own government in Central Florida.

What is the GOP governor doing?

DeSantis on Tuesday announced that Florida’s GOP-controlled Legislature would be considering legislation that would sunset “special districts” formed in the state prior to 1968. This includes the Reedy Creek Improvement District, the 25,000-acre development in Central Florida that houses Disney’s theme park. Lawmakers will also seek to eliminate Disney’s exemption to a previously- approved law aimed at cracking down on tech companies.

The governor’s office has not responded to questions asking why eliminating special districts was needed.

Why is DeSantis trying to eliminate special districts?

DeSantis and Disney have been feuding for months over Florida’s “Parental Rights in Education” bill, dubbed the “Don’t Say Gay” bill by opponents. The bill bans classroom instruction on gender identity and sexual orientation from kindergarten through third grade.

While Disney was silent as lawmakers debated the measure, the company voiced strong opposition after Florida approved the bill in March. Other LGBTQ supporters have also denounced the bill, including President Joe Biden, and have said it could leave students open to bullying and even suicide.

Disney urged for the repeal of the bill and went so far as to halt all political contributions to Florida’s elected officials.

But the move by DeSantis, a likely 2024 contender, and the Republican Legislature represents a major escalation in the fight. It essentially moves from rhetoric to hitting the company’s pocketbook.

What’s the deal with special districts?

Walt Disney Co. proposed the Reedy Creek Improvement District in the mid-1960s in a remote area of Orange and Osceola counties. It allows Disney to operate like its own county government and is responsible for municipal services such as power, water, fire prevention and road maintenance. It also means Disney doesn’t need approval from local planning commissions if it wants to build new structures.

The reason special districts were created was so taxpayers who don’t benefit from the services of the special district aren’t required to pay for it through taxes.

A huge benefit of special districts is making tax-exempt purchases for the services they provide and issuing municipal bonds for major infrastructure projects at a much lower interest rate, said Chris Lyon, an attorney who deals with special districts.

The measure lawmakers are considering would not permanently terminate the Reedy Creek Improvement District, but it would phase it out on June 1, 2023, and allow the special district to reestablish on or after that date.

If legislators approve the bill, as is expected, Disney would be able to go to the state Legislature in Tallahassee next year and request it be reestablished, likely under more limited capabilities and powers.