DeSantis Leaves Disney’s $578M Tax Break Untouched Despite Quarrel
On April 22, 2022, Governor Ron DeSantis signed legislation to end a special municipal district Disney has operated in the state since the late 1960s. It is part of a plan to punish the company for speaking out against a law, championed by the governor, that bans discussion of sexual orientation or gender identity in kindergarten to third-grade classrooms. But for now, at least, DeSantis is leaving alone another valuable perk: $578 million in credits Disney can use to reduce its state income taxes through 2040. A spokesperson for the governor said that DeSantis has not asked the legislature to repeal the tax credits because it is not a carve-out for a specific corporation. Any company can apply for the incentives, and the more significant investments will qualify for the bigger tax credits.
Florida economic development officials certified the credits in February 2020. In its application for the incentives, Disney cited 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. One of the state’s largest employers because of its theme parks there, the company is investing $864 million in the relocation, including office construction, supplies, and software improvements. Disney considered other states, including California, New York and Connecticut. In its application, the company said that the incentives were an integral part of the overall decision to determine this project’s location. DeSantis has been at war with Disney since employees pressured the company to speak up about the school bill in early March. The governor has also said he regrets signing 2021 legislation that exempted Disney from a bill preventing social media companies from banning candidates from their platforms. Lawmakers removed the exemption in the special session in April 2022. The legislation signed Friday calls for dissolving Disney’s Reedy Creek Improvement District. Still, it leaves some crucial questions unanswered, like 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?
Who pays? If the district is dissolved, Florida taxpayers will likely bear the cost. Orange and Osceola counties will probably 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 bills on Friday, DeSantis said residents should not be concerned about the services provided by the improvement district. In an interview, Anna Eskamani, a Florida representative, noted that not every business can qualify for the tax credits Florida offered Disney because they have high investment and job creation requirements. The governor could ask the legislature to consider repealing them if he wanted.
Florida’s risk. Challenging the tax credits could lead Disney to abandon plans to move the 2,000 workers to the state. The relocation has been controversial at the company, with many park designers presently in California preferring not to pack up and go to Florida. The issue has been one of the underlying elements fanning the internal opposition to the Florida schools bill, with a website created by employees explicitly asking the company to halt the move.
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