Saturday, January 14, 2023

DeSantis Is Trying to Take Control of a Private Company

Recently Jonathan Chait captured why I've been keeping an eye on Florida's Governor, Ron DeSantis. 

The threat of right-wing authoritarianism in the United States has lodged itself in the public mind in the model of January 6: A candidate for office refuses to accept defeat and then gins up phony legal complaints escalating into violence. But the more durable and successful model is the pattern used by strongmen like Viktor Orban, which does not require a violent assault on the state but instead employs a combination of legal methods...

The methods Chait identifies as those used by Orban include:

  • stacking legislative districts, 
  • using state power to bully corporations into support for the ruling party, 
  • marginalizing independent media and exploiting state-controlled pseudo-journalistic alternatives, and 
  • seizing control of the education system.
Chait goes on to point out that DeSantis is employing all of those methods. For a good run-down on how the governor is doing that, check out an article by Heather Digby Parton titled: "Ron DeSantis is tripling-down on the culture war — and running hard toward 2024." Parton provides us with an outline of how right wing authoritarianism is being rolled out in Florida in a way that is "more durable and successful" than the model used by Trump.

It is also important, however, to point out that several of the initiatives DeSantis has rolled out haven't been all that successful. That part of the story isn't getting told very often because clickbait media is geared toward soundbites, not how things develop over time. Such is the case with the governor's battle with Disney. To re-cap, here's a summary of what has happened so far:
  1. Disney took a public stand against the governor's "don't say gay" bill.
  2. In retaliation, DeSantis signed a bill to terminate all Florida special tax districts created prior to 1968 (including Disney's Reedy Creek District). It is set to go into effect on June 23, 2023.
  3. Reedy Creek holds about $1 billion in bond debt that would be passed on to Florida taxpayers if the special district is terminated. 
  4. Reports surfaced that the governor was working behind the scenes to come up with a plan that would make minor changes, but leave the special district in place.
The latest development is that last week a notice was posted on Osceola County's web site announcing that a bill will be introduced in the Florida legislature that will amend, reenact, and repeal portions of the legislation that created the Reedy Creek District. 

Under the original legislation, a board of supervisors governs the district. They must own land in the district and a majority must live in either Orange or Osceola County. The five members of the board are elected by landowners in the district. All of that is why Disney controls Reedy Creek - the district was drawn to contour the land owned or controlled by Disney.

According to spokespersons for DeSantis, a big part of his plan is to revise that so that the governor appoints the board of supervisors...and declare victory. 

Let's unpack some of that, shall we? The only thing that threatened Reedy Creek's responsibility for their outstanding debt was the governor's move to eliminate their status as a special district. When it comes to the district paying its fair share of taxes, here's what you need to know:

In addition to collecting and remitting sales taxes to the state (including the percentage that goes to each county) and Tourist Development Taxes from hotel guests, Disney pays property taxes to Orange and Osceola County at the same millage rate as all other county taxpayers (totaling nearly $300 million from 2015 to 2020). The Florida Constitution does not allow taxpayers within a county to be treated differently unless those taxpayers consent to the creation of a special taxing district to levy additional taxes on top of the regular county property taxes.

And that’s exactly what RCID has been doing for over 50 years. Disney pays additional taxes to RCID (at the highest millage rate in the state) to cover expenditures for government-type functions like building permitting, fire and emergency medical services, a power plant, water and waste treatment, trash and recycling, and construction and maintenance of roadways and waterways.

The annual budget for fiscal year 2022 is more than $160 million, and RCID uses those funds to maintain a higher standard for these various functions than any local, state, or federal government entity would be able to accomplish.

The only part of Frenske's statement that isn't total bullshit is the fact that DeSantis wants to impose a "state-controlled board." As state house representative Anna Eskamani put it, "the main goal is to give DeSantis control over a private company." 

Will the governor get away with doing that? Writing for Bloomberg Tax, attorney Jacob Schumer says "not likely."

If Florida attempts to place Reedy Creek under state control, Disney will have a much stronger court case than if the state simply dissolved the district...

Disney’s right to elect its representatives is much stronger than its right to have Reedy Creek exist at all. Disney, as property owner, was granted the statutory right to elect the district’s board of supervisors. If Florida tried to replace it with state political appointees...the state [would be] taking away a landowner’s right to vote for its local representatives—an action courts are much more accustomed to stepping in to prevent.

It is clear that DeSantis is a long way from solving this mess he created. Almost no one in the media is covering that part of the story. Reports tend to accept that the governor's attempt to dissolve Reedy Creek is a fait accompli. That is hardly the case.  

3 comments:

  1. Nancy, I absolutely love your take on this 'grab' from DeSantis. It is, I'm certain, not only illegal but also immoral in Florida to enact punitive laws that would destroy existing agreed-upon tax law. DeSantis has tried his bullying tactics à la tramp and Orban (and maybe a few other Republicans as well), and yet he now finds himself in the crush of his own making. Floridians should not let him off the hook nor should they accommodate his poor leadership by continuing his presence as governor. Good article; great writing.

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  2. The follow-up is interesting, but the end result remains: DeSantis used the power of the state to bully a private corporation because he didn’t like their political stance. I’m sure Disney does not appreciate having to go through this legal process - with its attendant reputational risks - just to keep their special tax status. Other corporations in red states will now think twice before doing anything even mildly political (and standing up for equal rights for LGBT people is now political) that displeases the governor & his allies. That’s how authoritarianism works.

    I’m sure DeSantis will agree to any arrangement that will get through the courts and that he can point to as a win. The control over taxation etc is not the point. The intimidation is the point.

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    Replies
    1. Good point. And of course it's also about projecting authority to a different audience or two, voters who might perceive him as strong and mainstream media with its horse-race games looking for (heaven help us) a national leader.

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