The Morning Dispatch: Annexing Disney World
Florida moves ahead with its plan to dismantle the special district that permits Disney to run its park like a county government.
Quick Hits: Today’s Top Stories
Following the first trip to Ukraine by high-level Biden administration officials since Russia’s invasion began, Secretary of State Antony Blinken announced U.S. diplomats who have been working out of Poland since mid-February will return to Ukraine this week.
President Joe Biden announced he’ll nominate career diplomat Bridget Brink to serve as U.S. ambassador to Ukraine, aiming to fill the role that has been vacant since former President Donald Trump removed Marie Yovanovitch in 2019.
Blinken and Defense Secretary Lloyd Austin announced an additional $713 million in foreign military financing for Ukraine and 15 other allies, as well as a $165 million sale of “non-standard ammunition” for Ukraine. “We want to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine,” Austin said.
One week after adopting a poison pill in an effort to block his takeover bid, Twitter’s board of directors announced Monday they had unanimously accepted Elon Musk’s offer to buy Twitter for approximately $44 billion and take it private. Twitter stock rose 5.7 percent on the day, as the Tesla and SpaceX CEO pledged to add new features to the social media platform, make its algorithms open-source, and “defeat” the spam bots. “I hope that even my worst critics remain on Twitter, because that is what free speech means,” Musk tweeted.
The Israeli Defense Force said it fired artillery shells into southern Lebanon on Monday in response to a missile strike from militants in the country it believed to be Palestinian. No injuries were reported in either strike; Israel said its response targeted the source of the launch and unspecified infrastructure.
U.S. District Judge Robert Summerhays issued a temporary restraining order halting the Biden administration’s plan to end Title 42, a pandemic-era policy that has allowed border officials to quickly remove illegal immigrants. The order is unlikely to have an immediate effect as the White House planned to revoke the policy on May 23 and it currently remains in place, but it could complicate the administration’s efforts in the coming weeks. Border officials have relied on Title 42 for more than a million expulsions since October 2021.
The Supreme Court on Monday temporarily allowed Thomas Jefferson High School for Science and Technology—a selective Northern Virginia high school—to continue using a new admissions policy intended to boost diversity. Parents suing the Fairfax County School Board had asked the Court to pause the policy while the case continued, arguing it unconstitutionally discriminates against Asian Americans. Justices Clarence Thomas, Samuel Alito, and Neil Gorsuch dissented.
European Union lawmakers reached a deal this weekend that—once formally approved by the European Parliament—will require tech companies to police content on their platforms or face massive fines up to 6 percent of their global revenue. The planned Digital Services Act would be stricter for platforms with more than 45 million users. A few of the proposed requirements: Sharing algorithm information with regulators and researchers, allowing users to report illegal content and acting quickly on reports, and dropping targeted advertising to minors.
Utah Democrats voted Saturday to back independent conservative Evan McMullin instead of nominating a Democrat to oppose Republican Sen. Mike Lee in November. Democrats don’t typically win in Utah, but McMullin won 20 percent of Utah’s vote in the 2016 presidential election, so state Democrats hope the never-Trumper has a shot at beating the Trump-supporting incumbent.
DeSantis Doubles Down on Disney Discipline
As Florida’s controversial House Bill 1557 was barreling through the state legislature in late February and early March, Bob Chapek—Disney’s relatively new CEO—was desperate to keep his company above the fray.
“Whatever Bob’s personal politics are, he’s not an activist and does not bring any partisan agenda to work,” Disney’s chief corporate affairs officer Geoff Morrell said when asked why Chapek wasn’t joining former Disney CEO Bob Iger in condemning the legislation progressive activists had labeled “Don’t Say Gay.” “He sees himself first and foremost as the custodian of a unifying brand that for nearly a century has been bringing people together, and he is determined that Disney remain a place where everyone is treated with dignity and respect.”
But facing pressure from LGBT activists, Disney-adjacent celebrities, Walt Disney’s granddaughter, and an increasingly vocal minority of Disney employees, Chapek reversed course. “You needed me to be a stronger ally in the fight for equal rights and I let you down. I am sorry,” he said in a company-wide memo on March 11, announcing a pause on corporate political donations in Florida. “I truly believe we are an infinitely better and stronger company because of our LGBTQ+ community. I missed the mark in this case but am an ally you can count on—and I will be an outspoken champion for the protections, visibility, and opportunity you deserve.” He reached out to Gov. Ron DeSantis in a last-ditch effort to convince him to veto the legislation.
DeSantis, of course, thumbed his nose at the appeal, vowing not to back down to “woke corporations” and signing the bill into law. Beginning July 1, Florida will prohibit classroom instruction on sexual orientation or gender identity for public school students in kindergarten through third grade, and for students of all ages if that instruction is judged to be “not age-appropriate or developmentally appropriate” in accordance with state standards. In a provision aimed at preventing teachers from secretly helping students transition genders, public schools will also be required to notify parents of any changes to the “services or monitoring” related to their child’s “mental, emotional, or physical health.” Critics have described the legislation as overbroad and rife with potential unintended consequences. (For more on the potential benefits and drawbacks of H.B. 1557, check out March 29’s TMD and March 30’s Dispatch Podcast.)
But for DeSantis and Florida Republicans, the episode was a clear victory. Not only did they enact legislation that responded to concerns of the conservative base, but they stood up to one of the largest and most powerful employers in the state—and lived to tell the tale. Results varied based on how the question was phrased, but some polls found a majority of Americans supported the law. “Conservatives who care about winning this fight ought to open their minds to the possibility that they are, in fact, going to win it,” Charlie Cooke wrote in National Review a few weeks ago. “They are going to win it by taking a clear, strong stance on the right side of a popular issue, and acting within the realm of ordinary political reality, not by burning everything down or by adopting tactics that they have traditionally abhorred.”
But DeSantis wasn’t satisfied with that victory, announcing on April 19 he was instructing Florida’s legislature to expand the purview of their special session to consider the “termination of all special districts that were enacted in Florida prior to 1968.” Three days later, he signed into law Senate Bill 4C—legislation that did just that, effective June 1, 2023.
According to the Department of Economic Opportunity, Florida currently has 1,845 such “special districts,” which are essentially units of local government that provide specialized services and are designed for a specific purpose. The Greater Orlando Aviation Authority, for example, controls Orlando’s International Airport. The Daytona Beach Racing & Recreational Facilities District oversees the Daytona International Speedway. The Village Center Community Development District manages The Villages, the retirement community where DeSantis was when he called for the expanded special session.
But only five such special districts are swept up by the pre-1968 cutoff, including the Reedy Creek Improvement District that governs Walt Disney World in Orange and Osceola Counties, which was established in … 1967. Some Florida lawmakers tried to claim the timing was coincidental, but DeSantis himself has not been particularly subtle.
“They pledged themselves to mobilize their considerable corporate resources out of the coffers of this Burbank, California, based corporation to overturn the rights of parents in the state of Florida—effectively commandeer our democratic process,” he told Fox News’ Tucker Carlson hours after signing the legislation. “That obviously is something we very much objected to.”
Disney did not respond to a request for comment from The Dispatch as to whether it plans to challenge the law on First Amendment grounds. Based on Supreme Court precedent established in O’Hare Truck Service v. City of Northlake—which involved a tow truck company being removed from a city’s list of contractors after the company didn’t support the mayor’s reelection campaign—they may have a case. But it’s not a slam-dunk one. “These cases are very difficult cases to actually win,” said one free-speech advocate who requested anonymity due to the sensitivity of their work. “If I’m a court, and I’m trying to imagine what’s going to happen if we side with Disney in this case, there would be a ton of litigation potentially over actions taken and comments made by legislators. And I can see a court being concerned about opening up the floodgates.”
“But targeting and removing Disney’s special exemption [because it opposed H.B. 1557] would violate the First Amendment, as I understand it, based on the Court’s precedent,” the source concluded.
DeSantis has argued there’s no perfect analogue for Disney’s situation. “This company had a deal unlike any company or individual in all of the state of Florida, probably anywhere in the United States,” he said Friday. “They were self-governing, they had extraordinary powers, they could build nuclear power plants, they didn’t have to go through permitting processes and obviously a lot of tax benefits. And that’s just inappropriate.”
Some quick history. About eight years after Disneyland opened its doors in California, Walt Disney began making plans for a second, much larger theme park that he envisioned as a utopian “city of tomorrow.” After settling on Orlando, Florida as the location, a clandestine team of Disney lawyers started buying up nearly 30,000 acres of swampland, making use of a series of shell companies to keep costs down. Once Disney was revealed to be the buyer, the price of an acre in the area exploded nearly 10,000 percent.
Walt died in 1966, but his older brother Roy put off retirement to carry out Walt’s vision for the second park—and the duo had learned some lessons from their first one. “Walt hated the fact that they were dependent upon Anaheim for public services and were regulated by the small city of Anaheim,” said Rick Foglesong, a political science professor at Rollins College who wrote a book on Disney World’s relationship with Florida. Once the real estate in Orange and Osceola Counties was secured—more than 50 times the size of the California park—Roy went to the Florida legislature and requested a carveout that—in exchange for bringing Florida billions of dollars in economic activity—would essentially allow the company to govern itself.
“Legislators gave it to [Disney] because they wanted it, and they said they wouldn’t come unless they got it,” Foglesong told The Dispatch. “They didn’t want to put Disney to the test on whether they would back down or not.”
The resulting entity, the Reedy Creek Improvement District (RCID), encompasses two towns—Bay Lake and Lake Buena Vista—that combined have a permanent population of about 50, and elect their own mayors and city councils. The RCID itself is governed by a five-member Board of Supervisors that is chosen by senior Disney employees who own land in the District.
By siloing off the RCID, lawmakers granted Disney—through these elected bodies—the authority and autonomy to develop almost all of its own municipal services specifically catered to its own unique needs, as well as oversee zoning, building codes, and the construction of highways. It manages its own sewage system, electricity generation and distribution, and fire department. According to the RCID’s website, the body has overseen the construction of 134 miles of roadways and 67 miles of waterways.
“You’ll notice you never see potholes when you drive up to Walt Disney World. That’s because Disney doesn’t have to wait for the county to come fix them,” David Ramba, executive director of the Florida Association of Special Districts, told The Wall Street Journal. “Reedy Creek is probably the most efficient local government in Florida, because it’s not a typical bureaucracy. It’s run like a business.”
But its independent status also ensures that Florida taxpayers aren’t on the hook for the costs involved in building and maintaining the largest theme park in the world. Although the company’s status exempts it from millions in certain fees imposed on developers after the RCID was created, Foglesong said it does pay both property taxes and sales taxes. “And in addition to that, they tax themselves through Reedy Creek,” he continued. “They use Reedy Creek to raise money from themselves and to then provide services unto themselves. That’s how those special taxing districts are supposed to work: Instead of relying on general taxation to produce public services that benefit everyone, you can use these taxing districts to raise money from yourself and to produce the kind of public services that are precisely tailored to what you need.”
Reedy Creek also raises money by issuing bonds, however, and some believe revoking Disney’s special status could end up sticking Floridians with the debt in the form of increased taxes. “The bill dissolving Reedy Creek doesn’t say what should happen to these debts, but another statute does,” Jacob Schumer, a Florida attorney, wrote for Bloomberg Tax. “By default, the local general-purpose government—the county—assumes the district’s debt, along with all of its assets. This means that theoretically, Orange and Osceola counties will inherit upward of $1 billion in bond debt.”
Orange County Tax Collector Scott Randolph—a Democrat and former member of Florida’s House of Representatives—is also raising the alarm. “IF Reedy Creek goes away, the [$163 million] it collects to operate services goes away,” he wrote on Twitter last week. “That doesn’t just transfer to Orange County because it’s an independent taxing district. However, Orange County then inherits all debt and obligations with no extra funds.”
DeSantis’ office said Friday it’s not their “understanding or expectation” for the law to cause “any tax increases for the residents of any area of Florida,” and vowed to propose additional legislation in the “near future” to address the situation. DeSantis spokeswoman Christina Pushaw told The Dispatch Monday any concerns were being pushed by “partisan politicians” and “do not stand up to critical thinking or basic logic,” arguing Disney would have ditched the arrangement years ago if it could dump the debt on taxpayers. “I will let you know when we have more to share regarding the specifics of the plan,” she said.
But Foglesong believes Reedy Creek’s value to Disney is primarily in the efficiency advantage it provides, and less so in the financial relief. “I had one the assistant director for the Imagineering Department tell me, ‘When we wanted water, we went out and drilled well,’” he said. “That was his metaphor for how it worked for them.”
Worth Your Time
Take a few minutes to read Charlie Cooke’s whole piece on the Disney kerfuffle. “This escalation represents an ugly and ill-conceived mistake, a blemish on DeSantis’s otherwise mostly excellent gubernatorial record,” he writes. “A good question to ask in politics is, ‘And then what?’ And so it is here. I have no doubt that, if they really want to, Governor DeSantis and the Republican majorities in the state legislature can revoke Walt Disney World’s special status, and I have no doubt that, in the short term, they might profit politically from doing so. But then what? Does the curriculum bill become even more the law? Of course not. In all likelihood, all that happens is Florida’s zoning policy gets a little worse, the legislature elects to tie itself up for years in extremely complex and costly litigation meant to untangle the state from Disney, and other large businesses note for the record that Florida’s heretofore-admirable commitment to solving big and complicated problems should henceforth be regarded with an asterisk. That’s not ‘fighting.’ It’s a tantrum.”
Remember the Biden administration’s plan to let “circles” of Americans volunteer to sponsor Afghan evacuees’ resettlement in the U.S.? It’s intended to let Americans support Afghans they know and take some of the pressure off resettlement agencies, struggling to keep up after cutting staff and resources in response to lower refugee admissions during the Trump administration. In The New Yorker, Eliza Griswold reports on some of those Sponsor Circles and the Afghans they’re helping. “This past winter, American military veterans, retired professors, pastors, and hundreds of others took a leading role in resettling displaced Afghans,” Griswold writes, “They’ve met planes from U.S. bases, found apartments, co-signed leases, puzzled through public-assistance paperwork, and located halal meat. (One trick: head to Costco.) The Sponsor Circle program began last fall as an emergency response to the arrival of Afghans. But Lucretia Keenan, a strategist for the program, told me that it was also the culmination of efforts by organizers across the U.S. to ease conditions for newcomers in the wake of the global migration crisis. ‘This is part of a global movement.’”
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Toeing the Company Line
On today’s episode of Advisory Opinions, Sarah and David discuss the First and Fourteenth Amendments, Puerto Rican statehood and federal disability benefits, and Deep Thoughts with Clarence Thomas. Plus, University of Texas law professor Steve Vladeck drops by for a conversation about the Supreme Court.
Join us again for Dispatch Live tonight at 8 p.m. ET for more lively discussion of the issues of the day and the philosophies that shape our current political environment.
Let Us Know
Which comes closest to your opinion?
The Reedy Creek Improvement District is good for both Disney World and Florida, and it should stay
The Reedy Creek Improvement District is crony capitalism and should be done away with, but not as punishment for Disney opposing Gov. DeSantis and Florida Republicans
Disney got what it deserved for wading into the culture wars, and Florida’s actions could deter other companies from doing the same