Yahoo Finance’s Rick Newman joins the Live show to discuss how Florida revoking Disney’s ‘special status’ could affect the state’s local taxpayers.
AKIKO FUJITA: Voters in Florida may have pushed through a bill to revoke Disney World’s special district status, but they may have forgotten a key provision that says they can’t do that without paying off the company’s $1 billion bond debt. Let’s bring in Yahoo Finance’s Rick Newman, who has been following all the twists and turns of this story. Rick, explain. What’s going on here?
RICK NEWMAN: Well, Disney finally filed a statement based on this action that happened last week. And they said, well, if Florida goes through with this– and let’s keep in mind, this is not supposed to go into effect until June of 2023, so more than a year from now. But they said, here would be the practical effects if Florida really wants to go through with this. There’s about a billion dollars in what’s effectively municipal debt that Disney has issued just to fund operations in that area. And that would have to be transferred to two counties, who then would have to overtake a lot of these municipal operations that Disney has been doing.
So these two counties have said, we don’t have the budget for that. And there’s one estimate that says this would raise taxes about $250 per year per taxpayer for people in those two districts to fund the municipal activities that Disney is now doing. So when you get deeper into the analysis, it looks as if maybe this was actually working out better for local residents than it was for Disney because Disney, in effect, was footing some of the bills for municipal services there in exchange for the autonomy to kind of govern itself.
So these Florida lawmakers clearly did not think this through. Generally, it’s a stupid move to try to punish any single company because it does or does not take the stance you want it to take on one political issue, which is exactly what happened here. So this is far from over. I suppose this means Disney could sue, or Disney could say, fine. We’re just going to– we’re not going to do anything. We’re just going to let you– we’re just going to let you follow through on this. And then you have to deal with the taxpayers who are going to get stuck footing the bill.
AKIKO FUJITA: I mean, it sounds like, Rick, that is the stance Disney is taking, right? To say, look, it’s fine, but you got to take on this debt. Until you do, we’re going to just stay put.
RICK NEWMAN: Right, and the governor, the Republican governor, Ron DeSantis, he has said, don’t worry. We’re not going to leave Florida taxpayers stuck with the bill here. We’re going to take care of this. We’re going to rectify this. But he hasn’t said how the government would do that. Basically, the Florida legislature would have to pass an additional law to straighten this out somehow.
And even then, basically, it’s as if Disney has a contract. And if they just say no, Disney has to eat the debt somehow, then it seems that Disney could probably basically claim it’s a breach of contract, and it could end up in the courts for a long time. I saw one person characterize the whole effort as the Lawyer Employment in Perpetuity Act. So what the Republicans seem to have done here is just create a legal thicket that’s going to go on for some time.
AKIKO FUJITA: It is a fascinating political battle to be watching here. Rick Newman staying on top of it for us. Thanks so much.