I think Florida has always been on the edge of "sexy"...
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Orlando Becoming East Coast Headquarters for Disney Parks, Experiences, and Products
- Thread starter The Visionary Soul
- Start date
Maybe, but it makes taxes a witch for the next three years...
CaptainAmerica
Premium Member
So many W2s.
Do you think you could take standing in the vestibule for 6 hours listening to that song without being ... er, chemically enhanced?
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WannaGoNow
Active Member
To the best of my knowledge, without having a payroll background (and no one in my household is a current TWDC employee; I have zero insight into the actual tax burden):
Payroll taxes are withheld from the employee’s paycheck and paid to the government on behalf of the employee, so Disney isn’t saving there. Federal income taxes still have to be paid. The employee will see an increased pay check thanks to no withheld state income tax in FL, but that’s not a savings to Disney (except it makes it easier to offer lower salaries). Also, California requires employers to withhold disability, so another increase for the employee - but again, that was withheld, not paid by Disney.
Disney will still need to withhold and match OASDI (Social Security) at 6.2% paid by employee and 6.2% paid by Disney, as well as Medicare at 1.45% for both, as those are federal benefits. Disney will still need to pay federal unemployment tax. Disney may see some savings by lowering salaries, but since the maximum amount of income eligible to be taxed for SS is $142,800, it’s doubtful the savings will be considerable. There is an additional Medicare tax on earnings over $200K, but the employee pays that.
Disney pays $434/employee on the first $7000 of wages for CA unemployment. Disney pays 0.1%, up to $7000 of wages/employee, for CA ETT (employment training tax).
In Florida, Disney pays 2.7% on the first $7000 of wages for reemployment tax, which is comes out to about $189/employee.
So…if my calculations are correct (and I might be completely off base), in all, Disney is saving about $7/role on ETT and $245/role on unemployment, for a total of $252 per role or $504,000 for 2000 roles. Not chump change, but Disney lost $70B last year in the pandemic. So, about the equivalent of finding a few pennies between the sofa cushions.
As for the employees, should they lose their jobs and qualify for unemployment benefits, CA’s unemployment benefit tops out at $450/week. Florida’s tops out at $275/week.
Disney needs to pay California’s 8.84% corporate income tax, but that’s based on CA operations, not payroll. If Disney cuts employee payroll but as a result makes $24M more a year on Disneyland operations - they‘re paying 8.84% on the $24M. And since employee salaries are deductible, might not want to lose that deduction, considering.
Disney gets hit with FL property taxes, while it enjoys CA’s Prop. 13 property tax loopholes.
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TrainsOfDisney
Well-Known Member
CaptainAmerica
Premium Member
We have TJ's everywhere Joe.
RSoxNo1
Well-Known Member
Disney also saves the accounting $$$ from not having to withhold and forward state taxes.
As for property taxes, I wouldn't be surprised to learn that FL/the county is offering some tax incentives to get Disney to move staff.
Chump change? Sure. But that's what Disney's all about these days. Coupl'a million here, coupl'a million there, pretty soon you're talking real money.
CaptainAmerica
Premium Member
Enormous, and likely long term.
wedenterprises
Well-Known Member
Disney's World Celebration Mobile Home Park Resort and Spa and Conference Center
FullSailDan
Well-Known Member
Payroll tax is certainly NOT what they are concerned about here, the cost of withholding and calculating them is basically a rounding error level expense.
What’s driving this is the cost of growth. Almost every county in central florida is offering crazy incentives to attract companies to build/lease offices in the area. Business tax incentives, permit fast tracking, to full blown cash incentives. TWDC can stand up huge new office buildings for cheap compared to dealing with CA real-estate, red tape and everything else. LA is basically tapped for growth and commutes have become absurd. They need to grow somewhere, which means more talent, which means higher salaries to afford COLA near the Burbank and Anaheim offices. This move is a win for them on that front.
The problem will ultimately become the talent pool here. I was part of an opening team for a new hub for Deloitte consulting. They were attracted by all the incentives Seminole county was pushing. Years later, they are still recruiting talent from out of state and paying them to relocate because the local talent pool is very lackluster. Verizon has faced similar issues with their major office in Lake Mary. KPMG has struggled with filling roles in their new learning center in Lake Nona, I get called by their recruiters several times a month.
The truth is Central Florida just isn’t that great of a place to live. Schools rank poorly, the area lacks for culture and cuisine, and the outdoors are basically unbearable from late May until the end of November. It’s a wonderful place to visit for the theme parks and stay for a while. But as a place to put down roots and raise a family it’s not great. People get here on the dream of sunshine, beaches, and great weather. But they spend a few years here and get out. The existing CA staff might get a bump in COLA but it will come with a hit to lifestyle.
But I’d caution that COLA is tricky here. Home values are getting steeper in central florida thanks to lack of construction. Our small starter home built in Kissimmee in 2015 sold in minutes for just under 400K. Nicer, larger 2 story homes in KISSIMMEE are selling for over 600K. Yes, way cheaper than LA proper, but not much cheaper than Corona, Lake Elsinore, and Riverside CA where many families are buying these days. Regional salaries here are very low in comparison. Rents have skyrocketed and home inventory is non-existent. Folks are going to have a tough time here. It’s rated as more unaffordable than San Francisco for a reason….
What’s driving this is the cost of growth. Almost every county in central florida is offering crazy incentives to attract companies to build/lease offices in the area. Business tax incentives, permit fast tracking, to full blown cash incentives. TWDC can stand up huge new office buildings for cheap compared to dealing with CA real-estate, red tape and everything else. LA is basically tapped for growth and commutes have become absurd. They need to grow somewhere, which means more talent, which means higher salaries to afford COLA near the Burbank and Anaheim offices. This move is a win for them on that front.
The problem will ultimately become the talent pool here. I was part of an opening team for a new hub for Deloitte consulting. They were attracted by all the incentives Seminole county was pushing. Years later, they are still recruiting talent from out of state and paying them to relocate because the local talent pool is very lackluster. Verizon has faced similar issues with their major office in Lake Mary. KPMG has struggled with filling roles in their new learning center in Lake Nona, I get called by their recruiters several times a month.
The truth is Central Florida just isn’t that great of a place to live. Schools rank poorly, the area lacks for culture and cuisine, and the outdoors are basically unbearable from late May until the end of November. It’s a wonderful place to visit for the theme parks and stay for a while. But as a place to put down roots and raise a family it’s not great. People get here on the dream of sunshine, beaches, and great weather. But they spend a few years here and get out. The existing CA staff might get a bump in COLA but it will come with a hit to lifestyle.
But I’d caution that COLA is tricky here. Home values are getting steeper in central florida thanks to lack of construction. Our small starter home built in Kissimmee in 2015 sold in minutes for just under 400K. Nicer, larger 2 story homes in KISSIMMEE are selling for over 600K. Yes, way cheaper than LA proper, but not much cheaper than Corona, Lake Elsinore, and Riverside CA where many families are buying these days. Regional salaries here are very low in comparison. Rents have skyrocketed and home inventory is non-existent. Folks are going to have a tough time here. It’s rated as more unaffordable than San Francisco for a reason….
CastAStone
5th gate? Just build a new resort Bob.
I agree. 35-40% is much better than typical.
They’re not.
DonaldDoleWhip
Well-Known Member
I know not the main topic of this thread but so true. I grew up in the suburbs of NYC and much of my family still lives in Manhattan - for years, everything else to them was unfathomable.
Even have some family friends who relocated to SF for a high-profile FAANG role. Made the most of it: bought a beautiful home and Tesla, went to lots of the top restaurants, explored amazing vineyards, etc. Hated it. Thought the whole city was dumpy and lacked interesting architecture. Also hated that people would dress down in restaurants rather than always look fashionable. To them, LA is just suburbs and Orlando is nothing.
Meanwhile, I really loved living in SF and am currently based near Irvine, which is also growing on me. I'd be open to Orlando if the cost of living stayed reasonable, but it seems like the last year has decreased the gap between desirable Florida spots and more reasonable options in SoCal.
Will be interesting to see if the 'return to work' decelerates the Sunbelt shift, or if people will remain set on Florida as an escape route from the likes of NY and CA. I know even my older sister (who was once a die-hard New Yorker) is open to South Florida now, and my dad was pleasantly surprised by Florida's Gulf Coast, so who really knows at this stage.
To all the Floridians dealing with an influx of New Yorkers, apologies.
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MorphinePrince
Well-Known Member
Great move! Lake Nona is a fantastic up and coming part of Orlando. I have no doubt the ones that make the leap will enjoy living and working in Central Florida!!
Notes from Neverland
Well-Known Member
That's good to know regarding Imagineering. I was curious how this would impact the Adventures by Disney trip that includes a tour of Imagineering, etc.
FullSailDan
Well-Known Member
The NY to FL thing is real right now. We got about 12 offers in 2 days of our house being on the market and several were cash offers from the NE all with stupid price escalation clauses.
Meanwhile I’m not the only Floridian I know to be making the post COVID move out west. To be fair we did consider moving more coastal in FL but there really aren’t great job prospects, the state politics are…special, and climate change is hitting coastal Florida HARD already. I hate to see the flooding in Miami and Tampa in 10 years. Speaking of flooding.. many Orlando areas are beginning to realize they need additional retention zones as our quick afternoon showers have become more.. all day. Neighborhoods weren’t designed for those. It’ll be interesting to see how the water management strategy changes in FL the next decade.
ctrlaltdel
Well-Known Member
Weirdly in WNY we are seeing pretty massive price increases in our homes (I live in an area where a lot of people from NYC own 2nd homes) from people moving from the NYC metro.
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