Florida Reedy Creek disbandment law won’t go to court, says government lawyer

MAITLAND, Florida. – A Maitland lawyer who specializes in local government issues said the law stripping Disney of its special government powers would not hold up in court.

Jacob Schumer questions the legality of Senate Bill 4C, which dissolves the Special District of Reedy Creek. Governor Ron DeSantis signed the law last week.

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Schumer’s insight gained a lot of traction this week after he published an opinion piece in Bloomberg News.

“I don’t see any way the bill that has been signed into law would stand if challenged in court right now,” Schumer said.

Schumer said the legislation that established the special district in 1967 gives Reedy Creek several powers, including higher property taxes.

“They can charge a lot of taxes. They can charge three times more than cities and counties,” Schumer said.

Schumer said that’s a significant power the district uses to issue bonds.

“The amount of taxing power is really critical to the value of the bond,” he said.

Schumer said when the special district was created, the state promised not to alter or restrict Reedy Creek’s right to levy or collect taxes and fees.

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“The State of Florida made a contractual promise and the purpose of that promise was to get people to buy these bonds and so the State of Florida is basically saying, ‘Never mind. We know we promised you that, but no more by dissolving Reedy Creek,” Schumer said.

There is still uncertainty as to who would be liable for Reedy Creek’s debts if the special district were dissolved.

DeSantis has said multiple times, including at a Thursday night town hall, that Disney will foot the bill.

“The bonds will be paid by Disney. They will pay taxes, probably more taxes. They will follow the laws that everyone else has to follow,” DeSantis said.

But Schumer said that based on current state law, special districts that dissolve will transfer their debt to local governments.

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“Until that changes, counties have to be prepared to take that on. And not only that, but support all the utilities that Reedy Creek currently runs and plays with its special taxes,” Schumer said. “The only way I’m going to see Disney take on the tax for this without just taking over the law is to create a special district that’s more or less functionally identical to replace Reedy Creek.”

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