Disney has long been a part of Florida's culture and history.
The 39-square-mile plot of land in Central Florida has been visited by millions of people at Walt Disney World's theme parks, and it includes the cities of Bay Lake and La Buena Vista.
That chunk of land is also part of the Reedy Creek Improvement District, which was created in 1967 to give Disney special tax status and privileges as its own town.
It also gave Disney control of everything from power and road maintenance to new construction, with a separate district that allowed Disney to operate as its own government in central Florida.
Disney is presently not required to seek permission from local cities to start construction while taxpayers, in turn, did not have to fund projects that benefit Disney.
All that may now be about to change, with major business implications possible and an almost certainly expensive fight on Disney's hands.
Florida Strips Disney of Its Special Tax Status
Florida's Republican-led state legislature has now passed a bill stripping Walt Disney World of its special tax district in the state.
The move follows weeks of discussion about whether Governor Ron DeSantis would retaliate against Disney DIS, which has pushed back against recent legislation to ban the discussion of gender identity and sexual orientation in Florida's public schools.
Over the last six months, Governor DeSantis began a campaign of retaliation after Disney CEO Bob Chapek publicly criticized a "parent rights" law passed in March.
Frequently called the "Don't Say Gay" bill by opponents, the newly-formed law forbids educators from discussing gender identity and sexual orientation with children from kindergarten to third grade.
What's The Disney-DeSantis Feud All About?
Opponents say the state's curb on discussion would stigmatize LGBTQ+ individuals and set Florida children back in age-appropriate education about their bodies.
Todd Anderson/Disney Parks via Getty Images
Chapek and Disney became more vocal in their opposition to the bill after LGBTQ+ employees criticized the company for not going "far enough" to oppose it.
"I understand our original approach, no matter how well intentioned, didn't quite get the job done," Chapek said during a March shareholders meeting, during which Disney also pledged $5 million to LGBTQ+ charities. "But we are committed to supporting the community going forward."
Disney has a market cap of $222 billion.
Chapek said the company had been silent earlier because he had tried to negotiate with DeSantis and Florida lawmakers.
Ultimately both non-vocal and vocal strategies failed, when Florida's state legislature approved the bill with a vote of 23-16 just three days after it was filed
What Does This Change For Disney Visitors (And All Of Us)?
While the change still needs to be passed into law and would only become effective on June 1, 2023, it could have massive implications on Disney's ability to do business.
"A huge benefit of special districts is making tax-exempt purchases for the services they provide and issuing municipal bonds for major infrastructure projects at a much lower interest rate," Chris Lyon, an attorney who deals with special districts, told Politico.
Barring a last-minute change of heart on the part of DeSantis or state lawmakers, the change will absorb Disney and its employees into the local counties.
It would also require Disney to seek the state's permission to build everything from new rides to hotels.
Local counties would themselves then be responsible for supporting Disney with taxes and absorbing any of the Reedy Creek's $977 million in debt.
Those details had Florida Democrats up in arms on April 21, as they derided the bill as impractical and conceived purely for political reasons.
"This is an enormous decision based on spite and revenge governance," Sen. Tina Polsky (D) said on Thursday.
How Will Disney Fight Back?
Changing Reedy Creek's government to such an extent after almost 60 years of being self-run would be both complicated and expensive.
As Disney is unlikely to let the special status go without a legal fight, the feud between Disney and Florida's Republicans is likely only just beginning.
'Our goal as a company is for this law to be repealed by the legislature or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that," Disney said of the "Don't Say Gay" bill in March.
"We are dedicated to standing up for the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country."
