Florida Governor Ron DeSantis tried to punish Disney because the company opposed the state’s “Don’t Say Gay” bill—amounting to an illiberal crackdown against one of America’s lead examples of private city governance. 

Florida’s bill stops teachers from teaching children in kindergarten through 3rd grade about sexual orientation or gender identity in a way that isn’t age-appropriate. 

“It’s basically saying for our younger students, do you really want them being taught about sex? And this is any sexual stuff. But I think clearly right now, we see a focus on transgenderism, telling kids they may be able to pick genders and all of that,” said DeSantis in defense of the bill.

In response, Disney suspended its political donations in Florida. “Our goal as a company is for this law to be repealed by the legislature or struck down in the courts,” said Disney in a statement.

DeSantis struck back. He announced that the state would dissolve the special district, Reedy Creek Improvement District, that gives Walt Disney World the power to self-govern. The state legislature quickly passed a bill doing just that.

Reedy Creek was established in 1967 and includes part of Orange and Osceola counties. When Walt Disney World was being developed, the existing county governments in Florida did not have the resources to support it. So the state legislature gave Disney its own district, which has the same authority and responsibility as a county government. 

This public-private arrangement has worked well for both parties. Reedy Creek provides its own services, like power, roads, garbage pickup, fire, emergency medical services, and has its own wastewater treatment plant. That saves money for taxpayers in both counties because they don’t have to fund those services. Disney gets to build whatever it wants on its own property, without having to go to the counties for permission—which is crucial given that its esoteric architecture would never pass standard municipal zoning and design review.

The move to dissolve the district is not supported by local politicians. “Disney has been a good community partner over the last 50-plus years,” says Orange County Mayor Jerry Demings. “They have been fairly self-contained. That has worked to the benefit of all Orange County residents because that has not been a tax burden to all of our residents.”

Dissolving the district would create a huge burden for taxpayers. Currently, Disney—a publicly-traded company with a $206 billion market cap—taxes itself to pay for services. Orange County Tax Collector Scott Randolph estimates the county would have to raise property taxes by 20% to 25%.

Additionally, taxpayers would have to absorb Disney’s debt. Reedy Creek historically operates at a loss of $5-10 million per year and has an estimated $1 billion in debt. Disney notes that the law that created the special district says that Florida “will not in any way impair the rights or remedies of the holders…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.” That means that unless Florida pays off the debt, dissolving the special district would be illegal. Disney could take the state to court to stop the bill.

But DeSantis insists that Floridians will not see tax increases and that Disney will pay off the debt. He also argues that dissolving the district is not about punishing Disney. 

“It just simply ends with them being treated the same as every other company in Florida,” he said. “They’re going to follow laws. They’re not going to have their own government. They’re going to pay their debts, pay their taxes.” Florida plans to replace the special district with one run by the state.

It’s hard to see the move as anything other than political punishment. The arrangement has been successful so far—one of America’s top examples of privatized city governance. Disney developed the land into a major tourist attraction that brings lots of money to the state. 

It’s a stretch to say that the district is a special privilege (there are 1,844 such districts in Florida, and thousands more across the country, many of which get utilized by corporations). But if it is, the privilege should be expanded, not removed. Florida should build on Disney’s success by making it easier for other companies and communities to create their own special districts. Reedy Creek is in fact a model that supposedly free-market conservatives such as DeSantis ought to like.

But perhaps the larger point conservatives should note is how markets often solve these culture war issues on their own. For example, as Disney has adopted an increasingly toxic brand of wokeism, its stock has declined in value the last 3 years, while the S&P 500 has increased by 40%. Letting consumers express their disapproval with their pocketbooks is a more just way to combat Disney’s offensive social positions than having state officials levy illiberal, extra-legal political punishments.  

This article featured additional reporting from Market Urbanism Report content staffer Rebecca Lau.