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Florida is ending Disney's special tax district. Here's what comes next

ARI SHAPIRO, HOST:

Florida lawmakers have been busy this week in a special legislative session. Among other things, the legislature passed a bill revoking Walt Disney World's status as an independent special district. Governor Ron DeSantis signed it into law today. The state gave Disney that status more than 50 years ago. It grants the company self-governing authority and exempts it from nearly all state regulations. Republicans in Florida decided to revoke it after Disney criticized the new law that limits discussion of LGBTQ issues in the classroom, the law that opponents describe as Don't Say Gay. I spoke earlier today with Nick Papantonis, a reporter with WFTV in Orlando, and I asked him what the special status actually does for Disney.

NICK PAPANTONIS: The way to think about a special district is like thinking about it like a city. It has the same functions almost to the T, where this is a place, is an extra layer of government that Disney has that allows it to control the functions on its own property. The district has a planning department. The district has a sewer plant. It runs the fire stations.

In return, instead of Disney approaching the county planning department or going to the county staff for services, Disney essentially controls the district that it's in. So it gets to ask itself for permission to do things, and it gets to direct itself, in a sense, for other things. On the flip side, the district also collects the taxes, an extra layer of taxes like your municipal taxes, that Disney in a sense pays itself.

SHAPIRO: So if that gets undone and suddenly the surrounding counties, Osceola and Orange counties, are responsible for everything from sewer to permitting to filling potholes, what does that actually mean?

PAPANTONIS: What that basically means is that the revenue that this district collects goes away. And that's our big issue here. This extra layer of tax that the district has is illegal outside of the district, and the counties can't replace it. The counties are now going to be responsible for picking up all the services the district provides. So that sewer plant, those fire departments, that planning department, they're going to have to do all of the work. They're also going to have to take on all of the debt that the district currently has, the municipal bonds that it's been issuing or it has issued, to do the big projects like build a road.

SHAPIRO: Is this a popular move? I mean, Governor Ron DeSantis has been pretty clear that it is punishment, full stop.

PAPANTONIS: The intention was to punish Disney for speaking out against the Parental Rights and Education bill, which more popularly known as the Don't Say Gay bill. Within the counties, it's hard to get a gauge, obviously, on every single citizen's opinion. Overwhelmingly, though, this is not a popular move in the counties itself.

While a lot of people would like Disney to get fewer tax breaks, for example, they understand that the district is a net benefit to the area. This just is services that Disney is essentially paying for that the counties don't have to provide in that area. So hearing that when the consequences of this hearing, that the property taxes for Orange County, for example, might have to go up 20% to 25% next year, nobody wants that.

SHAPIRO: The special district isn't scheduled to fully dissolve until June of next year. Is there a chance that this gets renegotiated, that a deal gets cut before then?

PAPANTONIS: So everyone's looking at the two possible moves forward because we don't know how Disney is going to respond right now. And we also don't have insight into the minds of every single legislator. One of the avenues that could happen is that Disney chooses to sue the state government. The other path forward - and this is the one that attorneys think is the most likely scenario at this point - is that the legislature gave themselves time to get this done, right? June of 2023, that's 15 months from now. And that is after, importantly, the next legislative session, which is supposed to be starting up in January.

There's a very good possibility, based on what Republicans and Democrats are saying in the chambers right now, as well as all the legal experts, that Disney uses lobbying power to come back, sit down at the table with the officials, and hash out a modified agreement that maybe strips some of the powers that Disney has that it doesn't really use right now and maintains a lot of the things that the company really cares about.

SHAPIRO: That's Nick Papantonis, reporter with WFTV in Orlando. Thanks for speaking with us today.

PAPANTONIS: No problem. Transcript provided by NPR, Copyright NPR.