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Plans by Florida Republicans to end Disney World's special status may not be legal

STEVE INSKEEP, HOST:

The state of Florida exacted retribution on Disney for expressing an opinion. Governor Ron DeSantis signed a bill that would end Disney World's status as an independent special district. The area essentially governs itself. It has ever since 1967, when a state law allowed Disney to provide services and avoid nearly all state regulations. Now that's been revoked after the company criticized an unrelated state law. But will the state's plan work? Here's NPR's Greg Allen.

GREG ALLEN, BYLINE: For decades, Disney held a special place in Florida's culture and politics. Because of its clout and popularity with families of every political party, few elected officials questioned why the state gave it the authority to operate its own private government with the ability to tax itself and issue municipal bonds - that is, until last week when Governor Ron DeSantis signed a bill passed by the Republican-led legislature to end Disney's special status.

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RON DESANTIS: That was really the first step in what's going to be a process to make sure that Disney should not run its own government.

(APPLAUSE)

ALLEN: DeSantis and Republicans in the legislature were open about why they were taking aim at Disney's private government structure - the Reedy Creek Improvement District. They're upset over the pledge by the company's CEO to work to overturn the Parental Rights in Education act, a law critics call "Don't Say Gay." DeSantis said Disney had, quote, "crossed a line." But even before he signed the bill into law, there were lots of questions and few answers about how you dissolve an independent special district with nearly $1 billion in outstanding bonds and whether it's even legally possible to do so. Municipal law expert Jake Schumer says DeSantis's plans run afoul of federal and state contract law and the terms under which the district was created.

JAKE SCHUMER: The state of Florida very clearly promised they would not mess with Reedy Creek. They wouldn't alter their powers. They wouldn't abridge their powers. They wouldn't interfere with their ability to basically self-manage.

ALLEN: Most especially, Schumer says, Florida promised not to interfere with Disney's ability to collect taxes and to pay its bondholders. It's a legal conflict, he says, that will have to be resolved in court.

Disney made some of the same points in a statement it posted with the Municipal Securities Rulemaking Board last week. It's the only comment from the company so far on the measure targeting its special status. Disney said the 1967 law setting up the independent special district ensured the state could not limit its ability to collect taxes and service its debt until all bondholders were paid. Fitch Ratings agency this week warned it may downgrade the bonds because of concerns about political pressure. Among those most alarmed at the recent developments are officials in Orange and Osceola counties, which under the new law would get most of the district's assets - its roads, sewage treatment facility and power plant - and its nearly billion-dollar debt. Jerry Demings is Orange County's mayor.

(SOUNDBITE OF ARCHIVED RECORDING)

JERRY DEMINGS: We are just like everybody else. We're trying to understand what the legislature truly is trying to do in this case. But I believe they have not adequately contemplated the ramifications of what they have proposed at this point.

ALLEN: Orange County's tax collector says homeowners may face a rate increase of 20% in order to pay the debt in a state that already has high property taxes. DeSantis dismisses those worries.

(SOUNDBITE OF ARCHIVED RECORDING)

DESANTIS: Under no circumstances will Disney be able to not pay its debts. We will make sure of that. Do not worry about that.

(APPLAUSE)

ALLEN: DeSantis says the bill doesn't take effect until more than a year from now, so there will be plenty of time to work out the details.

Greg Allen, NPR News, Miami.

(SOUNDBITE OF FRAMEWORKS'S "ALL DAY") Transcript provided by NPR, Copyright NPR.

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