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

Sirwalterraleigh

Sirwalterraleigh

Premium Member
Disstevefan1 said:
Wait, so after 257 pages, we find out tax payers are already (and I presume all along) paying for these bonds and by that logic, there will be ZERO increase in taxes as a result of dissolving RCID??….

If that is true, there seems to me there could only be increased revenue to the state when RCID is dissolved.

WOW folks how come it took so long to know this???
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Yes…the RCID bond debt is being paid by one tax payer
1651509657141.jpeg
 
Disstevefan1

Disstevefan1

Well-Known Member
mmascari said:
Let's pretend we haven't read the last 256 pages, and that we don't know anything about contracts.

Let's just pretend that the FL legislature could write a law that would allow them to dissolve a bond issuing government entity and have all the bond debts just disappear. Think of it like a subsidiary company issuing bonds, then the holding company just closes the subsidiary in the dark of night. Say they spin it off and immediately declare bankruptcy liquidation.

What would that do to the bond issuing rating for every other bond issuing government entity in the state of FL? What would it do to the ability of those other government entity to function?

In the company example, what would it do to the holding company and all their other subsidiary companies?

Instant junk bond rating and complete dry up of access to borrow any money. It would plunge the state and the fictional company into chaos as they no longer have access to borrow money.

So, in that pretend world, it's a total catastrophe. Good thing we don't live in that pretend world. Everyone has read the last 256 pages and understands this just isn't a possible outcome.
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I guess you missed my wink emoji.
I was joking, I know the debt will go to Orange and Osceola counties and TWDC will win big.
 
lentesta

lentesta

Premium Member
GoofGoof said:
There’s no legal mechanism to move municipal bonds to a corporation’s books. It cannot happen. The debt either stays with RCID if the decision is reversed or if it’s not reversed then FL law says it goes to the local government which in this case is Orange and Osceola counties. That could then end up in Federal Court as the bondholders have a guarantee from the state that the district will not be harmed or dissolved until all debt is payed off.

For sure. Even if both sides agree to a compromise the bondholders could very well take this to court. Damage has already been done and the bonds are trading down 10%+ from where they were before this situation. Bondholders could sue for financial damages already.
Click to expand...

The FL legislature would also have to increase the maximum tax rate allowed under law, because RCID pays a higher rate than that already.

And, as has been mentioned, the FL legislature has previously said they can't change the RCID while the RCID has contracts (and bonds) in place.

Fitch has already downgraded the RCID bonds because of the FL legislature's actions. And their explanation was basically a warning to every debt-issuing business in Florida to expect higher interest rates as a result:

ESG-Rule of Law, Institutional & Regulatory Quality, Control of Corruption: Reedy Creek Improvement District (FL) [General Government] has an ESG Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality, Control of Corruption, revised from '3', to reflect state actions to dissolve the district, which points to a substantially reduced degree of independence from political pressure. These actions potentially diminish government effectiveness and could prove harmful to bondholders, which has a negative impact on the credit profile and is highly relevant to the Negative Watch action.
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In Fitch's rating system, '1' is good and '5' is bad; '3' is essentially the default position.

It's worth noting that Fitch's reasoning, including these phrases:
  • "reduced degree of independence from political pressure"
  • "potentially diminish government effectiveness"
    and
  • "prove harmful to bondholders"
are criticisms of the FL government, not the RCID or Disney.
 
lazyboy97o

lazyboy97o

Well-Known Member
Disstevefan1 said:
Wait, so after 257 pages, we find out tax payers are already (and I presume all along) paying for these bonds and by that logic, there will be ZERO increase in taxes as a result of dissolving RCID??….

If that is true, there seems to me there could only be increased revenue to the state when RCID is dissolved.

WOW folks how come it took so long to know this???
Click to expand...
This isn’t new information. Reedy Creek levies taxes on land in the District. Those taxes don’t transfer to the state.
 
T

thomas998

Well-Known Member
lazyboy97o said:
It isn’t Disney saying this. It’s a bunch of others who are looking at the plan as called for by state law. Why don’t you present to us the mechanism by which municipal bonds can legally be changed to corporate bonds, and it also has to not tank the credit rating of every other municipal entity in Florida? How does the state force the federal government to take on new debt? How does the state force bond holders to take early repayment?
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The state of Florida doesn't need to change any municipal bond into a corporate bond, the state of Florida could simply create an area of special property taxation that happens to cover what was Reedy Creek and then allocate the Reedy Creek debt to that area's property holders, which in this case would be Disney. I've worked in cities where special areas within a city were created that hit every business within that area with special taxes to cover costs associated with that area. In some instances it was done in ways that hit business based on X dollars per square foot with an exemption for any business under 5000 square feet so that it only hit large multi-floor building... there are lots of ways the state could nail Disney for all the money the debt requires and then some. Disney is aware of this and its the reason they are so upset. Even if the State just passes some new law that only hits Disney for the 2 billion debt, Disney knows it would still be hit going forward for property taxes like every other business in the area and that those taxes would be used for things based on a governing body that they no longer control as they control Reedy Creeks government.
 
Disstevefan1

Disstevefan1

Well-Known Member
lazyboy97o said:
This isn’t new information. Reedy Creek levies taxes on land in the District. Those taxes don’t transfer to the state.
Click to expand...
... The tax payers are already paying for the bonds.
... Those taxes don’t transfer to the state.
Third base!

These post keep going in circles.... and NO ONE knows what's going to happen..

That said, I like this thread better than the Coronavirus in Walt Disney World thread, it's fun to read... :D
 
lazyboy97o

lazyboy97o

Well-Known Member
thomas998 said:
The state of Florida doesn't need to change any municipal bond into a corporate bond, the state of Florida could simply create an area of special property taxation that happens to cover what was Reedy Creek and then allocate the Reedy Creek debt to that area's property holders, which in this case would be Disney. I've worked in cities where special areas within a city were created that hit every business within that area with special taxes to cover costs associated with that area. In some instances it was done in ways that hit business based on X dollars per square foot with an exemption for any business under 5000 square feet so that it only hit large multi-floor building... there are lots of ways the state could nail Disney for all the money the debt requires and then some. Disney is aware of this and its the reason they are so upset. Even if the State just passes some new law that only hits Disney for the 2 billion debt, Disney knows it would still be hit going forward for property taxes like every other business in the area and that those taxes would be used for things based on a governing body that they no longer control as they control Reedy Creeks government.
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This has already been addressed. Doing what you suggest is restricted by state law and would still be an attempt to change the terms of the bonds.

Disney already pays property taxes to the counties. Tax information has been posted. You’re entire starting point is untrue.
 
lazyboy97o

lazyboy97o

Well-Known Member
Disstevefan1 said:
... The tax payers are already paying for the bonds.
... Those taxes don’t transfer to the state.
Third base!

These post keep going in circles.... and NO ONE knows what's going to happen..

That said, I like this thread better than the Coronavirus in Walt Disney World thread, it's fun to read... :D
Click to expand...
There’s no circle, just you making weird and ridiculous extrapolations. There are multiple groups of tax payers paying taxes to various different entities.
 
Disstevefan1

Disstevefan1

Well-Known Member
lazyboy97o said:
There’s no circle, just you making weird and ridiculous extrapolations. There are multiple groups of tax payers paying taxes to various different entities.
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Thanks for your thoughtful critique.
It is confusing (for me, not for you obviously).
Some post say, when RCID is dissolved there will be a bont debt passed to taxpayers as an increase in taxes.
Some say taxpayers are already paying for the bonds. I am not a mathematician but that sounds like there would be no tax increase.
Please clarify for me, and (I think) it could be answered with yes or no.
IF RCID is dissolved and there is NO replacement special district, will taxpayers see a tax increase related to the bonds?
 
peter11435

peter11435

Well-Known Member
thomas998 said:
The state of Florida doesn't need to change any municipal bond into a corporate bond, the state of Florida could simply create an area of special property taxation that happens to cover what was Reedy Creek and then allocate the Reedy Creek debt to that area's property holders, which in this case would be Disney. I've worked in cities where special areas within a city were created that hit every business within that area with special taxes to cover costs associated with that area. In some instances it was done in ways that hit business based on X dollars per square foot with an exemption for any business under 5000 square feet so that it only hit large multi-floor building... there are lots of ways the state could nail Disney for all the money the debt requires and then some. Disney is aware of this and its the reason they are so upset. Even if the State just passes some new law that only hits Disney for the 2 billion debt, Disney knows it would still be hit going forward for property taxes like every other business in the area and that those taxes would be used for things based on a governing body that they no longer control as they control Reedy Creeks government.
Click to expand...
You really aren’t even attempting to be an informed participant in this discussion are you?
 
lazyboy97o

lazyboy97o

Well-Known Member
Disstevefan1 said:
Thanks for your thoughtful critique.
It is confusing (for me, not for you obviously).
Some post say, when RCID is dissolved there will be a bont debt passed to taxpayers as an increase in taxes.
Some say taxpayers are already paying for the bonds. I am not a mathematician but that sounds like there would be no tax increase.
Please clarify for me, and (I think) it could be answered with yes or no.
IF RCID is dissolved and there is NO replacement special district, will taxpayers see a tax increase related to the bonds?
Click to expand...
They are different groups of tax payers paying different taxes. Right now, RCID taxpayers pay for the bonds. If the bonds are transferred to the counties then county tax payers pay for the bonds.
 
Disstevefan1

Disstevefan1

Well-Known Member
lazyboy97o said:
They are different groups of tax payers paying different taxes. Right now, RCID taxpayers pay for the bonds. If the bonds are transferred to the counties then county tax payers pay for the bonds.
Click to expand...
Who the heck is RCID taxpayers right now????
You can't be referring to the handful of folks living manufactured homes inside the borders of RCID ???????
 

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