The Walt Disney Company, a global entertainment giant, has found itself on the wrong side of a political battle with Ron DeSantis, the Republican governor of the state of Florida, where Disney employs nearly 80,000 people in a constellation of theme parks, hotels, and restaurants, constituting the single largest tourist attraction in the world.
On April 19, in a news conference, DeSantis called on Florida legislators to revoke a special tax status that, for more than 50 years, has allowed Walt Disney World to operate as the de facto municipal government within the 39-square miles its parks cover in central Florida. Less than 48 hours later, both chambers of the legislature had done what DeSantis asked. The governor signed the bill Friday.
The hurried process gave interested parties little time to assess the effects of the policy change, but the message it sent to Disney and other companies in Florida was clear: crossing DeSantis can lead to swift and severe retribution by the state’s government.
Origins of the fight
The dispute in Florida relates to a measure that DeSantis signed into law in late March, called the Parental Rights in Education bill. The aim of the new law was to restrict discussion of sexual orientation and gender identity in public schools. In kindergarten through the third grade, all discussion of LGBTQ issues is banned under the law. For all older children, any such discussion must be “age appropriate.”
The state law empowers parents to sue schools if they believe their child has been instructed on LGBTQ issues inappropriately. Opponents of the bill have characterized it as the “Don’t Say Gay” law, because the vague language in the statute makes it unclear exactly what is considered appropriate.
The Walt Disney Company has significant political influence in the state of Florida, but it was not initially engaged in the discussion about the proposed law. This prompted protests from some of its employees, who complained that the company should have been using that influence to protect its LGBTQ workers and their families.
Disney takes a position
On March 11, Disney CEO Bob Chapek sent a contrite note to the company’s employees, apologizing for the company’s lack of action.
“Our employees see the power of this great company as an opportunity to do good. I agree,” he said. “Yes, we need to use our influence to promote that good by telling inclusive stories, but also by standing up for the rights of all.”
Chapek went on to say that Disney would increase its support for advocacy organizations resisting similar legislation around the country. He also said that the company had paused all political donations in Florida while it considers how to be sure those donations reflect the company’s values.
On March 28, after DeSantis signed the bill, the company issued a statement attributed to a representative saying the bill “should never have passed and should never have been signed into law.”
It continued, “Our goal as a company is for this law to be repealed by the legislature or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that. We are dedicated to standing up for the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country.”
Offense taken
In the United States, it is not at all uncommon for businesses to express their opposition to actions taken by the government at the federal, state, or local level. In fact, doing so is considered constitutionally protected speech.
However, Florida’s governor took particular exception to the company’s statement on the Parental Rights in Education law, and almost immediately began discussing the possibility of revoking the company’s status within the 39-square-mile area known as the Reedy Creek Improvement District.
The district was created in 1967, specifically for the project that would become Walt Disney World. It gives the company broad authority over how the property is developed. In exchange, the Walt Disney Company is responsible for all municipal services in the district, including fire and rescue operations, road repairs, and sewers and water treatment.
DeSantis couched his calls for the change in language suggesting that he was addressing broader concerns. “I would say any special privileges that are in law I would like to get rid of generally,” he said.
However, of the more than 1,800 special districts that have been created within Florida, Disney’s is the only one affected by the legislation.
Reaction mixed
Among Democrats, both in Florida and across the country, the move to punish Disney was broadly criticized. On Thursday, while at a fundraiser in Oregon, President Joe Biden said, “Christ, they’re going after Mickey Mouse,” adding that in his view the “far right has taken over the [Republican] party.”
Among Republicans, the reaction was more mixed. A number of prominent conservative outlets appeared to support the move. The Wall Street Journal editorial page, for example, said that the move stands as a “warning” to other companies, “especially Big Tech and Wall Street.”
“If they try to impose their cultural values, they risk losing Republican allies on the policy issues that matter most to their bottom lines, such as regulation, trade, taxation, antitrust and labor law,” the editorial said.
Others were less sanguine. Writing in the Atlantic, conservative attorney and author David French worried that in their haste to punish Disney, Florida’s Republicans were abandoning a commitment to the Constitution’s protection of free speech.
“With the passage of Florida’s bill targeting Disney, it’s unambiguous now,” he wrote. “As the right cheers Ron DeSantis, it is forsaking the First Amendment.”
Uncertain impact
The bill rescinding Disney’s tax status will not take effect until next year, but local officials are already scrambling to figure out what its impact will be.
Currently, in its capacity as the government of the Reedy Creek Improvement District, Disney charges itself $165 million in taxes each year. Those taxes go toward the municipal services that the company provides. The district also carries about $1 billion in bond debt, on which Disney, as the de facto government, makes payments.
Local officials in Orange and Osceola counties, where the district is located, have said that they are concerned that they will have to sharply raise taxes on their residents in order to provide the services for which Disney now pays.
The complex of Disney theme parks and supporting services brings an estimated $75 billion in revenue to central Florida every year. According to the Themed Entertainment Association, in 2019 they combined to attract 58.8 million visitors from around the world.
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