What is the DeSantis v. Disney battle really about?

Note: See bottom of post for updates on this story.

It’s been hard to miss the recent battle going on between Florida Gov. Ron DeSantis and the state’s largest employer – Disney Corp.  Gov. DeSantis wants to take away tax management privileges from areas developed by Disney over the last 50 years because Disney has been critical of anti-LGBTQ+ legislation promoted by the governor.

There are multiple levels to this battle that are worth digging into as we try to understand what’s going on.

The core of this fight is that Disney CEO Bob Chapek was forced by employee pressure to speak out forcefully against a new Florida law that forbids talking about issues related to sexual orientation and identity in kindergarten through fourth grade classes.  This has been known by critics as the “Don’t say gay” law. These critics say that the law could prevent grade school teachers from talking about their same-sex spouse if a student asked who they were married to.

The Florida legislature, under prompting from Gov. DeSantis, responded quickly by passing a bill that strips Disney of its ability to self-govern a huge area of property surrounding the  company’s theme parks in retribution for being too “woke.” (Disney has a diverse work force and has a long history of having gay pride days and events at their parks.)

Now, one doesn’t have to love Gov. DeSantis to believe that perhaps Disney has too much control over the areas they operate. After all, Disney was involved in a fight with the government and local media of Anaheim, Calif. a few years back over special property taxes. Hint: It didn’t end well for Disney. In this case, Disney was trying to control what local news outlets were publishing about a property tax deal by keeping LA Times critics from attending the studio’s movie screenings. The Times refused to back down and got support from news outlets across the country. In the end, Disney quit trying to control what the paper had to say about the company and its taxes. Please note that this was settled not on legal grounds; Disney simply didn’t have enough power to bend the press to their will.

So how is Florida retaliating against Disney to punish them for opposing this  anti-LGBTQ+ bill? To answer that requires us to go back in time a bit. Sarah Rumpf, writing for the MediaIte blog, tells the story of how in the mid-1960s, Disney was proposing building a giant new theme park in Florida. The company quietly bought up 39 square miles of space that would come to include “the Magic Kingdom, Epcot, and Animal Kingdom, plus numerous Disney hotels, restaurants, and retails stores.”

This space would become the Reedy Creek Improvement District (RCID). A 1967 Florida state law created the district to give Disney essentially all the powers of a local government. They could collect taxes (and pay some of them to the state) as well as develop infrastructure like roads, fire protection, power plants, sewage treatment and the like. (Allegedly Disney even had the right to build a nuclear power plant! They never even considered doing so, but still…) They could also take on debt for development of the area and collect more taxes than would normally be allowed to pay for all of these. (Disney would essentially be taxing itself in order to pay for infrastructure.)  While I would never want to argue about the ethics of Disney’s behavior, they clearly have done a good job of taking care of their property.

In other words, the Reedy Creek project follows a standard conservative model of allowing private industry to take over functions of government in the name of more efficiency. And regardless of what you think about these partnerships in general, this one seems to have worked relatively well. While RCID is the most prominent development district in Florida, it is far from the only one – the state has literally hundreds of them, though few are as big as Disney’s.

Now one could argue that Disney doesn’t deserve this special treatment because it’s bad for the Florida economy or for business competition. But Gov. DeSantis has made it abundantly clear that he is doing this specifically to punish Disney for being critical of the “Don’t Say Gay” bill. In fact, Republican legislators have offered to rescind the bill if Disney were willing to back off from its opposition. (It doesn’t take effect until 2023.)

There are a number of questions raised by this case:

• Does taking away the right to govern themselves violate Disney’s corporate free speech rights? 
  Hard to say. Florida clearly has the right to revoke special tax districts. But can they shut one down to punish the company for speaking out against the governor? That’s a whole ‘nother question.
• Haven’t progressives been critical of Disney, too? 
  They sure have, especially when it comes to real estate development. Long-time Miami Herald columnist and comic novel writer Carl Hiaasen wrote critically about Disney’s real estate dealings in a short book called Team Rodent: How Disney Devours the World.
• Is Disney going to pack up and leave Florida over this? 
  I don’t see how. A theme park is not a fungible asset. You can’t just move it somewhere else.

Updates

4/27/22