Gov. Ron DeSantis has fired back at claims that he and state legislators can’t dissolve Disney World's Reedy Creek Improvement District without incurring massive debt.
What You Need To Know
- A 1967 agreement between the state and Reedy Creek Improvement District requires any bond debts to be paid off before the district can be dissolved
- Gov. Ron DeSantis says he's figured out a way to dissolve the district and make Disney pay for any bond debts
- A national bond agency says if the state doesn't work with RCID to settle debts, it may have to lower bond ratings for governments across the state
RCID, which is the governing jurisdiction and taxing district for Walt Disney World, is scheduled to dissolve on June 1, 2023, after the state legislature passed a law in special session and the governor signed it.
Critics say the bill was in response to Disney voicing criticism over another bill passed into law year, the so-called “Don’t Say Gay” bill.
Government law attorney Jacob Schumer told Spectrum News 13 that a 1967 agreement between the state and RCID requires any bond debts to be paid off before the district can be dissolved and it’s governing powers taken away.
But when asked about it in a FOX News town hall interview in Orlando Thursday night, DeSantis said he and his legal team have it all figured out, though the claim ended up being light on details.
“The legislature did it starting next June because there’s going to be additional legislative action, we’ve contemplated that," DeSantis said. "We know what we’re going to do, so stay tuned, that will all be apparent."
“The bonds will be paid by Disney, they will be paying taxes, probably more taxes," he added. "They will follow the laws that every other person has to do, and they will no longer have the ability to run their own government."
As the law stands now, Orange and Osceola counties could end up being responsible for paying the debts, and that could force those counties to raise property taxes. The Governor’s Office has not released any details about the state’s plan, but Schumer said he can see a possible scenario where the state could get around the original agreement.
“Whatever the governor does, it has to have all the same powers as Reedy Creek does right now,” said Schumer. “So it’s possible he could create some kind of substitute government entity, but it’s going to have to be essentially the same as Reedy Creek.”
Schumer said the governor could install his own board of directors instead of dissolving the actual district, but that would be a step back from what the governor and Legislature intended.
FitchRatings, one of the nation’s three biggest credit rating agencies, put Reedy Creek’s utilities revenue bonds “A” rating on a Rating Watch Negative because of the uncertainty of how all of this will be settled. The agency said a failure of the state to work with the district could end up affecting the credit rating of all Florida local districts.
“The failure to do so could alter our view of Florida’s commitment to preserve bondholder rights and weaken our view of the operating environment for Florida governments,” said the agency in a news release.
Schumer said if the bond rating of other cities and counties is lowered, that could make their cost of borrowing go higher and force those governments to raise taxes.