FL state legislature jammed a bill through during a special session to dissolve RCID. The Governor and bill sponsors have been crystal clear in telling anyone who will listen that this is being done as a direct retaliation to Disney speaking out against another bill which we cannot talk about here. Since this was not well thought out or debated and no experts were brought in to lay out the issues there are more open questions than answers. Basic questions open:
- If RCID is dissolved FL state law says the assets and liabilities of the special district would go to the local municipality which is likely to be Orange and Osceola counties. Since TWDC already pays their full share of taxes to the counties, same as any other property owner, the theoretical result is a large tax break for Disney. The major downside is all of the services currently provided by RCID (fire, roads, utilities) would have to be picked up by the counties with no additional tax revenues to pay for them. As a result the Orange County tax collector estimates all taxpayers in the county could see as much as a 20-25% increase in real estate taxes
- The liabilities of RCID include around a billion dollars of municipal bonds. Those would shift to the counties as well. The issue there is the bond holders were given a guarantee by the state of FL that nothing would happen to the ability of RCID to collect taxes or pay back the bonds. That covenant would be broken if the district is dissolved. This is a Federal issue covered by securities laws that could potentially block the law from going into effect.
- The governor and other politicians have claimed they have a plan, it’s a really good plan and it results in Disney paying more in taxes and no tax increase for other taxpayers. So far no details at all have been shared. Just repeated promises. We are all expected to take their word that there is a plan.
- There is a potential 1st Amendment Federal lawsuit that has been discussed too. Disney has said nothing publicly but there is some pretty compelling evidence that this is being done by the government to punish Disney for speaking out politically. That evidence includes multiple recordings of the politicians involved saying this was done as a punishment. I know we are in the fake news era where even when there’s a video of someone saying something directly some people refuse to believe it’s real but it seems pretty obvious.
So to answer the original question, nothing is going on. The law was passed but doesn’t go into effect until next June. Disney has said nothing publicly. RCID has only publicly commented about the violation of the bond covenants and said they plan to conduct business as usual. As a result of this the ratings agencies have put RCID bonds on negative watch which has resulted in a drop in the price the bonds are trading at. Bond holders (pension funds, investment firms, etc) have already been hurt financially. The politicians involved all took public victory laps and we’ve seen reports of increased donations coming in as a result. There was one dubious lawsuit filed in Federal court on behalf of several local taxpayers. That was thrown out of court because it was filed in the wrong jurisdiction among other issues. Some took a victory lap on that news too. The guy who filed it is a political hopeful and says he will refile in State court.