The Disney/Reedy Creek debacle in Florida keeps getting worse by the day for GOP Gov. Ron DeSantis, who has now pissed off financial bond ratings agency Fitch with the Republican law dissolving Disney's development district in direct violation of the state's contract with the House of Mouse.
One of the nation’s leading bond rating agencies warned Thursday that if the state of Florida doesn’t resolve a conflict over its decision to repeal Walt Disney World’s Reedy Creek Improvement District and its obligation to investors, the move could harm the financial standing of other Florida governments.
Fitch Ratings posted the alert late Thursday on its Fitch Wire web site, nearly a week after Gov. Ron DeSantis signed into law the measure dissolving the special taxing district that governs Disney property by June 1, 2023.
Reedy Creek Improvement District holds nearly $1 billion in bond debt and last week Fitch issued a “negative watch” because of the uncertainty around how that debt will be paid and by whom.
The agency said the situation “reflects a unique and dynamic level of discord” and expects the state to “ultimately work with various stakeholders to resolve the uncertainty.”
But it also added a warning: “The failure to do so could alter our view of Florida’s commitment to preserve bondholder rights and weaken our view of the operating environment for Florida governments.”
Fitch and other ratings agencies cutting the credit rating of Florida governments will cost state taxpayers billions in borrowing costs, and that is going to wreck the state's budget. DeSantis and his people know this, and they can't wait to blame those awful Disney people for it.
A 1967 state law that established the Reedy Creek Improvement District on 39 square miles of Disney property gave the district the power to issue bonds and tax itself to build roads, sewers and utilities, establish its police and fire departments, and regulate its construction. In exchange, the state pledged “it will not limit or alter the rights of the District...until all such bonds together with interest thereon...are fully met and discharged.”
The law dissolving the district does not address how the bonds will be paid, but on Friday when he signed the measure, DeSantis said: “We’re going to take care of all that. Don’t worry. We have everything thought out. Don’t let anyone tell you that somehow Disney is going to get a tax cut out of this. They’re going to pay more taxes as a result of that.”
DeSantis knows full well what's coming, and he's going to shift the blame to Democrats as soon as he can. Most likely, he's going to get away with it too.