News Reedy Creek Improvement District and the Central Florida Tourism Oversight District

[mikejs78]

My interpretation of Home Rule is that municipalities are allowed to govern themselves without needing to seek approval from the state.

However, the Florida Constitution also includes this:

(a) ESTABLISHMENT. Municipalities may be established or abolished and their charters amended pursuant to general or special law. When any municipality is abolished, provision shall be made for the protection of its creditors.​

Am I misinterpreting this?

Thanks!

Right but the transfer of government powers clause requires a vote.

 

[GoofGoof]

My interpretation of Home Rule is that municipalities are allowed to govern themselves without needing to seek approval from the state.

However, the Florida Constitution also includes this:

(a) ESTABLISHMENT. Municipalities may be established or abolished and their charters amended pursuant to general or special law. When any municipality is abolished, provision shall be made for the protection of its creditors.​

Am I misinterpreting this?

Thanks!

I hope so. That sounds like a terrible loophole that was certainly not intended to support this type of action.

 

[mikejs78]

perfectly legal for the Governor with the backing of the legislature to just dissolve any local government and take control of the municipality.

This is the key. The legislature can dissolve things, but the state can't just take them over. Home rule says that local governments prevail. So even if the governor dissolved Reedy Creek, LBV, and BL, the land would become unincorporated land within the two respective counties and controlled by the counties, not by the state.

Any new improvement district would also be subject to home role by the voters within the unincorporated territory. Without dissolving LBV and BL, which would be very difficult to do, That complicates creating a new special district, I guess because of home rule.

So it's not necessarily the dissolving that is prohibited, but rather what happens after the fact that makes it very difficult.

Although I said it before, there are several reasons why the dissolution law may not even apply to RCID.

This is just a mess, first amendment issues aside. It's just bad governance..

 

[Chip Chipperson]

My interpretation of Home Rule is that municipalities are allowed to govern themselves without needing to seek approval from the state.

However, the Florida Constitution also includes this:

(a) ESTABLISHMENT. Municipalities may be established or abolished and their charters amended pursuant to general or special law. When any municipality is abolished, provision shall be made for the protection of its creditors.​

Am I misinterpreting this?

Thanks!

Wouldn't the part about "pursuant to general or special law" be the key part of that statute? It seems as though there would need to be a justification for abolishing a municipality outright. I would think that the section of the FL Constitution you quoted is intended to allow municipalities to merge (such as 2 small neighboring towns merging to save on administrative expenses, but that would require the debts of each municipality to be assigned to the new municipality created by the merger) and/or change their charter (from a Town to a City, for example). It was certainly not put in there to allow the governor to come in a shut down a municipality just to clear a path to exacting political revenge.

 

[GoofGoof]

Wouldn't the part about "pursuant to general or special law" be the key part of that statute? It seems as though there would need to be a justification for abolishing a municipality outright. I would think that the section of the FL Constitution you quoted is intended to allow municipalities to merge (such as 2 small neighboring towns merging to save on administrative expenses, but that would require the debts of each municipality to be assigned to the new municipality created by the merger) and/or change their charter (from a Town to a City, for example). It was certainly not put in there to allow the governor to come in a shut down a municipality just to clear a path to exacting political revenge.

Right and as @mikejs78 pointed out even if the district is dissolved by a special law as is the case here there is nothing that says a replacement district could be created without the consent of the taxpayers in that district and run by representatives that were not elected by them. So far nobody has been able to point to anything within the law that allows that but it’s key to the Governor‘s plan that supposedly exists.

 

[Nubs70]

Technically, DeSantis isn’t doing an “intervention” on a “private business”. He’s doing an “intervention” on a special district.

I’ve previously posted quotes from the Florida Constitution (which trumps any Florida law) that allows the legislature to create, eliminate, or modify counties and municipalities by simple majority vote. (There are some Home Rule districts protected in the Florida Constitution, but RCID is not one of them.)

Florida statutes are not as powerful as the article suggests. Legislatures have the legal authority to alter their own statutes by majority votes. Existing Florida statutes protects RCID and Disney only to the extent that the legislature does not change them.

The article would have been much more informative if it included references to specific parts of the Florida Constitution (which the legislature cannot change by simple majority vote) that prevent DeSantis from doing what he’s trying to do.

I’ll emphasize this again - I do not think what DeSantis is trying to do is right. I think he has violated Disney’s First Amendment rights. I think Disney has an ironclad case for this.

There’s also some debate that he might have violated the Contracts Clause of the U.S. Constitution. However, I quoted a Supreme Court ruling that does allow the State to alter contracts, as long as those alterations are not “substantial”. This then leads into a subjective discussion of what is a “substantial” alteration.

These federal issues aside, the article focuses on Florida law. Exactly what Florida laws are the article referring to and what prevents the legislature from passing new laws to create exceptions to those existing laws?

To be clear, I am trying to understand, First Amendment aside (which Disney hasn’t even mentioned yet), where exactly is there something that he cannot simply change (with the concurrence of the majority of the legislature) based on Florida law.

Again, this does not mean I think DeSantis is right. But is it legal?

Had DeSantis announced his move against RCID, as an act to reform special tax districts, the day before Chapek made his proclamation, would DeSantis's move be legit?

 

[peter11435]

Had DeSantis announced his move against RCID, as an act to reform special tax districts, the day before Chapek made his proclamation, would DeSantis's move be legit?

It wouldn’t be a first amendment violation. But it would still be misguided, bad for Florida, bad politics, and full of legal issues.

 

[lazyboy97o]

Had DeSantis announced his move against RCID, as an act to reform special tax districts, the day before Chapek made his proclamation, would DeSantis's move be legit?

How they were being reformed matters. Many of the issues are outside the motivation. The motivation just makes it worse because it is an authoritarian move.

 

[lazyboy97o]

There’s also some debate that he might have violated the Contracts Clause of the U.S. Constitution. However, I quoted a Supreme Court ruling that does allow the State to alter contracts, as long as those alterations are not “substantial”. This then leads into a subjective discussion of what is a “substantial” alteration.

Why do you keep ignoring that Florida precedent calls for the State to demonstrate a public need for the contracts to be changed?

 

[mikejs78]

Consistent with Blaisdell, the precedent I read has to do with making "substantial" changes to a contract.

If you could please provide the case you have in mind, that would be a big help.

Thanks!

You keep going back to federal cases. We are talking about FL law, not federal, in regards to contracts.

 

[Disney Glimpses]

This is the key. The legislature can dissolve things, but the state can't just take them over. Home rule says that local governments prevail. So even if the governor dissolved Reedy Creek, LBV, and BL, the land would become unincorporated land within the two respective counties and controlled by the counties, not by the state.

Any new improvement district would also be subject to home role by the voters within the unincorporated territory. Without dissolving LBV and BL, which would be very difficult to do, That complicates creating a new special district, I guess because of home rule.

So it's not necessarily the dissolving that is prohibited, but rather what happens after the fact that makes it very difficult.

Although I said it before, there are several reasons why the dissolution law may not even apply to RCID.

This is just a mess, first amendment issues aside. It's just bad governance..

Right. This is why I've looked at this whole thing side eyed from the very beginning: Disney has the leverage here.

 

[Nubs70]

Consistent with Blaisdell, the precedent I read has to do with making "substantial" changes to a contract.

If you could please provide the case you have in mind, that would be a big help.

Thanks!

I would presume "substantial " would imply "substantial" impact. I see 2 classes that could be considered to experience "substantial " impact.
1. Bondholders
2. Tax payers.

If RCID can be allowed to sunset, no new bonds, to the point where existing bonds are paid in full at date of maturity, neither class 1 nor class 2 would experience "substantial" impact.

The above could be used as a model to reform special tax districts which is a stated goal of DeSantis that has been voiced prior to the Chapek Proclamation

 

[mikejs78]

If RCID can be allowed to sunset, no new bonds, to the point where existing bonds are paid in full at date of maturity, neither class 1 nor class 2 would experience "substantial" impact.

And how could that be done? Who would pay for it? And keep in mind that the bond contracts contain a closet say Reedy Creek will be able to continue to build and take on new bonds.

The above could be used as a model to reform special tax districts which is a stated goal of DeSantis that has been voiced prior to the Chapek Proclamation

When did DeSantis ever say that? He never said a word about it before.

 

[lazyboy97o]

Consistent with Blaisdell, the precedent I read has to do with making "substantial" changes to a contract.

If you could please provide the case you have in mind, that would be a big help.

Thanks!

I already have. It’s the Sears case referenced in the Bloomberg Tax article that quotes prior cases.

The conclusion, however, that “‘virtually’ no impairment is tolerable necessarily implies that some impairment is tolerable,” though not as much impairment as would be “acceptable under traditional federal contract clause analysis.” Pomponio, 378 So. 2d at 780. “Some impairment” may be “tolerable” where the governmental actor can demonstrate a “significant and legitimate public purpose behind the regulation.” Searcy, 209 So. 3d at 1192 (quoting Energy Reserves Grp., Inc. v. Kan. Power & Light Co., 459 U.S. 400, 411 (1983)).​

https://edca.4dca.org/DCADocs/2016/2314/162314_DC08_07122017_091028_i.pdf

Just wanting to dissolve or take over a District is not a significant purpose. The State presumably has to demonstrate that the District is harming the public in some manner so egregious that it has to be stopped at the expense of the contracts. Just wanting to change things is not a significant public purpose. If the District was actually ignoring state law that would be something but the State has presented no evidence nor sought to utilize existing enforcement mechanisms.

 

[GoofGoof]

When did DeSantis ever say that? He never said a word about it before.

He says he was thinking about it. We just need to trust him that’s true. Funny how his goal to reform or eliminate special tax districts didn’t impact the thousands of other districts untouched by this bill. It’s complete political spin for anyone to say this is part of a plan that existed all along. If you don’t believe me, just ask the governor. He’s told anyone who would listen he’s punishing Disney. So either he’s punishing Disney or he was planning this all along and he’s now lying to the public. Either way that’s a great quality I want in an elected official

 

[lazyboy97o]

The above could be used as a model to reform special tax districts which is a stated goal of DeSantis that has been voiced prior to the Chapek Proclamation

No, he did not. This isn’t about a specific wide type of District needing reform as Reedy Creek is a unique district. In fact, the governor has claimed to being wholly ignorant of Reedy Creek until recently.

 

[LittleBuford]

Had DeSantis announced his move against RCID, as an act to reform special tax districts, the day before Chapek made his proclamation, would DeSantis's move be legit?

As we all know—and as DeSantis himself has made amply clear—he wouldn’t have made such a move in the first place had Disney not spoken out against the bill. There’s little sense in trying to imagine this as happening in the absence of a retaliatory motive when those responsible aren’t pretending otherwise.

 

[FutureCEO]

It's like Facebook. Everybody is a expert on tax law now

 

[lazyboy97o]

It's like Facebook. Everybody is a expert on tax law now

Why don’t you point out the specific statements with which you take issue?

 

[GoofGoof]

Regarding this part of the Florida Constitution:

SECTION 4. Transfer of powers.—By law or by resolution of the governing bodies of each of the governments affected, any function or power of a county, municipality or special district may be transferred to or contracted to be performed by another county, municipality or special district, after approval by vote of the electors of the transferor and approval by vote of the electors of the transferee, or as otherwise provided by law.​

IMO, the "or as otherwise provided by law" suggests that, as an alternative, the Florida legislature can pass a law to transfer powers without the approval of electors.

Regarding:

Ad valorem taxes, exclusive of taxes levied for the payment of bonds and taxes levied for periods not longer than two years when authorized by vote of the electors who are the owners of freeholds therein not wholly exempt from taxation, shall not be levied in excess of the following millages upon the assessed value of real estate and tangible personal property: for all county purposes, ten mills; for all municipal purposes, ten mills; for all school purposes, ten mills; for water management purposes for the northwest portion of the state lying west of the line between ranges two and three east, 0.05 mill; for water management purposes for the remaining portions of the state, 1.0 mill; and for all other special districts a millage authorized by law approved by vote of the electors who are owners of freeholds therein not wholly exempt from taxation. A county furnishing municipal services may, to the extent authorized by law, levy additional taxes within the limits fixed for municipal purposes.​

We assumed that the State of Florida would recreate RCID as a special district within a local county. DeSantis' most recent statements indicate that he has no intention of doing so:

More likely that the state will simply assume control, and make sure that we’re able to impose the law and make sure we’re collecting the taxes.​

What happens to RCID after its dissolution? Perhaps DeSantis (with support from a majority of the legislature) intends to create a new non-chartered county as allowed by the Florida Constitution:

(a) POLITICAL SUBDIVISIONS. The state shall be divided by law into political subdivisions called counties. Counties may be created, abolished or changed by law, with provision for payment or apportionment of the public debt.​

And:

(f) NON-CHARTER GOVERNMENT. Counties not operating under county charters shall have such power of self-government as is provided by general or special law. The board of county commissioners of a county not operating under a charter may enact, in a manner prescribed by general law, county ordinances not inconsistent with general or special law, but an ordinance in conflict with a municipal ordinance shall not be effective within the municipality to the extent of such conflict.​

The State of Florida legislature has the power to enact general or special laws as long as they do not violate the Florida or U.S. Constitutions.

RCID's current millage is 13.5. Bay Lake's and Lake Buena Vista's both are 2.1. This seems to be well under the 21.0 (excluding schools) allowed by the Florida Constitution.

But since Orange and Osceola Counties currently collect taxes from Disney, how do those counties not lose tax revenue if "the state will simply assume control"? This is the part where I think DeSantis is smoking something. He complains that Disney is not paying their “fair share”. In reality, Disney is paying more than their fair share.

Just so @GoofGoof doesn't have to write it again, this is dark stuff.

And I will write this again, just so people don't think I'm defending DeSantis: This is wrong.

I'm just trying to figure out if this is legal according to Florida law. (I'm already convinced DeSantis has violated Disney's First Amendment rights and maybe the Contracts Clause.)

The issue I see here is that the RCID land is already part of a county so in order to carve that land out into a non-chartered county wouldn’t it need to be removed from Orange and Osceola counties first? It cannot be in 2 counties at once so those counties would lose Disney and the other landowners as taxpayers. Also, in a non-chartered county wouldn’t the board of county commissioners still need to be elected by the landowners? Is there any legal way for the state to take control of the county without any say of the landowners? Seems very unlikely that will fly.