Taxpayers of a county adjacent to Disney’s theme park area have joined the battle of Reedy Creek, claiming that Florida Gov. Ron DeSantis violated their rights when he signed a law dissolving the special tax district.
In a complaint seeking to block the law filed Tuesday in Florida federal court, residents who live near Disney World argue they and other taxpayers will be burdened with at least $1 billion in Disney’s bond debt if the state follows through with its plan to dissolve the Reedy Creek Improvement District. “It is without question that Defendant Governor DeSantis intended to punish Disney for a 1st Amendment protected ground of free speech,” reads the lawsuit. “Defendant’s violation of Disney’s 1st Amendment rights directly resulted in a violation of Plaintiffs’ 14th Amendment rights to due process of law.”
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A lawsuit challenging the law was widely expected after Florida lawmakers passed a bill in April stripping Disney of its special privileges of self-governance in retaliation for its opposition to the so-called “Don’t Say Gay” law.
Under the new law, independent special districts that were created prior to 1968 and haven’t been renewed since will be dissolved in June 2023 unless a new agreement is reached. Since Reedy Creek operates much like a local government, including borrowing money for infrastructure projects by issuing bonds, the question of what happens to the district’s bond debt has remained unanswered.
Residents of the nearby Osceola county, who filed the lawsuit, say dissolving Reedy Creek will likely lead to increased taxes for the residents of Central Florida to pay off Disney’s bond debt, estimated to be between $1 billion and $2 billion.
Disney and residents of the land it owns in Orlando bear the costs of maintaining the area, including paying for emergency and waste management services. The company’s status as a special tax district also exempts it from a host of regulatory hurdles.
“Stripping Disney of this special district designation will move these major regulatory burdens unto the county, thereby increasing the Plaintiff’s taxes, and will cause significant injury to plaintiffs,” the complaint states.
According to the lawsuit, the Florida Supreme Court has historically given standing to taxpayers, allowing them to challenge “threatened wrongful proceedings.” The suit claims that under Florida law, people and entities who aren’t technically parties to contracts can sue to enforce them when a breach can injure them.
The complaint also takes aim at Florida lawmakers “threatening to take thousands of jobs” from the state in retaliation for protected speech. It argues Florida is violating Disney’s constitutional rights.
So far, Disney has stayed silent on its feud with Florida. In a statement to investors, Reedy Creek claimed that dissolving the special tax district would violate a pledge by Florida to bondholders not to “modify in any way the exemption from taxation provided in the Reedy Creek Act, until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged.”
Reedy Creek said it expected to explore its options while “continuing its present operations.”
Disney and DeSantis’ office did not respond to requests for comment.
