Florida Reedy Creek dissolution law won’t stand in court, government attorney says

Jacob Schumer says state is breaking contractual promise made to bond holders

Jacob Schumer is questioning the legality of Senate Bill 4C, which dissolves the Reedy Creek special district. Governor Ron DeSantis signed the legislation last week.

MAITLAND, Fla. – A Maitland attorney specializing in local government issues said the law stripping Disney of its special governing powers will not hold up in court.

Jacob Schumer is questioning the legality of Senate Bill 4C, which dissolves the Reedy Creek special district. Governor Ron DeSantis signed the legislation 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 that the bill that was signed into law can stand if it was challenged in the court right now,” Schumer said.

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

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

Schumer said that is an important power the district uses to issue bonds.

“The amount of taxing power is really central to how valuable the bond is,” he said.

Schumer said when creating the special district, the state made a promise to not alter or abridge Reedy Creek’s right to levy or collect taxes and fees.

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

There is still uncertainty around who would be on the hook for Reedy Creek’s debts if the special district is dissolved.

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

“The bonds will be paid for by Disney. They will be paying taxes, probably more taxes. They will follow the laws that every other person has to do,” DeSantis said.

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

“Until that changes, the counties need to be ready to take that on. And not just that, but take on all of the utilities that Reedy Creek is currently managing and playing for with its special taxes,” Schumer said. “The only way that I can see Disney picking up the tax tab for this without just straight up taking back the law is to create a special district that is more or less functionally identical to take the place of Reedy Creek.”


About the Author:

Amanda Castro, a proud UCF alum, joined the News 6 team in November 2015 and was promoted to weekend morning anchor in April 2016. Go Knights!