Reedy Creek: Why Disney has its own government in Florida and ...

Editor’s Note: This story was originally published on April 21, 2022. It has been updated to reflect Florida’s 2023 special legislative session.

CNN —

Disney’s Orlando-area theme parks and who will govern them are under renewed scrutiny in Florida – the latest in a yearlong spat between Republican Gov. Ron DeSantis and the state’s largest private employer.

Lawmakers have returned to Tallahassee for a special session called in part to address what happens to Disney’s special taxing district, called the Reedy Creek Improvement District, after they previously passed legislation dissolving it, which was supposed to take effect in June.

State Republicans on Monday unveiled a bill to turn over control of Disney’s special taxing district to a five-member board hand-picked by DeSantis and rebrand Reedy Creek the “Central Florida Tourism Oversight District.”

The move to take over Reedy Creek comes after DeSantis sparred last year with Disney over a bill to restrict certain classroom instruction about sexual orientation and gender identity.

Here’s a look at the history of Reedy Creek, why it has become the focus of another special legislative session in Florida, and how proposed changes would give DeSantis more control.

What is Reedy Creek?

Reedy Creek is the name for the Reedy Creek Improvement District, a special purpose district created by state law in May 1967 that gives The Walt Disney Company governmental control over the land in and around its central Florida theme parks. The district sits southwest of Orlando.

At the time, the land was little more than uninhabited pasture and swamp, according to Reedy Creek’s website. With the special purpose district, Disney took over responsibility for providing municipal services like power, water, roads and fire protection – but was also freed from dealing with legal red tape or paying taxes for services that benefited the broader public.

According to Richard Foglesong, the author of the book “Married to the Mouse: Walt Disney World and Orlando,” Disney had previously had issues with the government of Anaheim, California, at its Disneyland park, completed a decade earlier. With those issues in mind, Disney pushed for a special purpose district in Florida that would give the company the ability to self-govern.

In exchange, Florida became the home base for Disney World and its millions of tourists.

“Florida needed Disney more than Disney needed Florida,” Foglesong told CNN.

Today, the Reedy Creek special district encompasses about 25,000 acres in Orange and Osceola counties, including four theme parks, two water parks, one sports complex, 175 lane miles of roadway, 67 miles of waterway, and the cities of Bay Lake and Lake Buena Vista, its website says.

“The cooperation and commitment between the Reedy Creek Improvement District and Walt Disney World Company is as strong today as it was when the District was created in 1967,” the Reedy Creek website states. “The result is an example of how a working partnership between business and government can be prosperous for both sides.”

Why is this an issue now?

Last year, DeSantis challenged lawmakers to unravel the 55-year-old Reedy Creek Improvement Act as part of a special legislative session and ultimately signed a bill that would sunset the district on June 1.

Lawmakers left town without a plan to unwind a half-century of Disney control or for how to ensure Orange and Osceola county residents wouldn’t be on the hook for funding Reedy Creek services or its $1 billion in debt. Amid the fallout, Reedy Creek told its bondholders that Florida could not dissolve the district without assuming its debts.

DeSantis repeatedly offered assurances that taxpayers wouldn’t have to pick up the tab.

Now, GOP lawmakers have returned to the state Capitol and are trying to breath new life into the taxing district and keep many of its special powers. The final page of the 189-page bill proposed Monday states: “The Reedy Creek Improvement District is not dissolved as of June 1, 2023, but continues in full force and effect under its new name.”

The Republican-controlled legislature is likely to pass the proposed changes within the next couple of weeks and the governor is supportive of them.

What are lawmakers proposing?

The bill, introduced Monday by state Rep. Fred Hawkins, seeks to limit the damage that could be done to Disney, one of the state’s most vital tourism engines, and to taxpayers.

The measure guarantees that the changes to Reedy Creek will not affect the district’s existing debt or any other contracts.

Instead of ending the district, the proposed legislation would rebrand it as the “Central Florida Tourism Oversight District” and curb some of its powers, including the ability to build an airport or a nuclear power plant.

The board, previously made up of Reedy Creek landowners with close ties to Disney, will instead become a five-member board of supervisors appointed by the governor. The bill makes clear that none of the appointees chosen by the governor can be recent Disney employees or their relatives, nor that of a competitor. The state Senate, where Republicans hold a super majority, would have final approval of the appointees.

“These actions ensure a state-controlled district accountable to the people instead of a corporate-controlled kingdom,” DeSantis spokesman Jeremy Redfern said.

What has Disney said?

Disney said Monday it is watching the bill.

In a statement to CNN, Jeff Vahle, the president of Walt Disney World Resort, said the company is “monitoring the progression of the draft legislation, which is complex given the long history of the Reedy Creek Improvement District.”

“Disney works under a number of different models and jurisdictions around the world, and regardless of the outcome, we remain committed to providing the highest quality experience for the millions of guests who visit each year,” Vahle said.

What does this have to do with Florida schools?

Reedy Creek has been tied to the feud between DeSantis, who has widely been seen as a potential 2024 GOP presidential contender, and Disney over a measure that bans certain instruction about sexual orientation and gender identity in the classroom.

The “Parental Rights in Education” bill – which critics have dubbed the “Don’t Say Gay” bill – was signed into law last March and prohibits schools from teaching children about sexual orientation or gender identity “in a manner that is not age-appropriate or developmentally appropriate.” The legislation also allows parents to bring lawsuits against a school district for potential violations.

The law’s vague language and the threat of parental lawsuits have raised fears that it will lead to discrimination against LGBTQ students and will have a chilling effect on classroom discussion. DeSantis spokesperson Christina Pushaw said on Twitter last year that the legislation would protect kids from “groomers,” a slang term for pedophiles, and described those who oppose the law as “probably groomers.”

Bob Chapek, the then-CEO of Disney, which employs 75,000 people in Florida, initially declined to condemn the law last year but reversed course after facing employee criticism. A company spokesperson then released a statement stating its goal was for the law to be repealed by the legislature or struck down in the courts.

“Florida’s HB 1557, also known as the ‘Don’t Say Gay’ bill, should never have passed and should never have been signed into law,” the March 2022 statement said. The company said it was “dedicated to standing up for the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country.”

Eric Levenson Dianne Gallagher Steve Contorno Jack Forrest

Florida governor Ron DeSantis takes control of Disney World district ...

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Florida Gov. DeSantis takes over Disney district on eve of book launch

TALLAHASSEE – Flexing his power over one of Florida’s largest employers, Gov. Ron DeSantis signed into law Monday a measure stripping away Walt Disney Company’s self-governing status, payback after the tourism giant defied him last year.

The Legislature approved the bill almost three weeks ago. But DeSantis apparently timed the signing to the eve of his new book release, which he also touted Monday.

The governor, widely expected to announce his campaign for the Republican presidential nomination, also twice used what is emerging as a favorite taunt aimed at the company – warning, “there’s a new sheriff in town.”

“The corporate kingdom has come to an end,” DeSantis said.

The governor’s book, “The Courage to Be Free,” which will be formally launched Tuesday, covers the Disney dispute at length, laying out his version of the backstory and clash with the entertainment icon.

The legislation signed Monday recasts the Reedy Creek Improvement District, the special taxing district controlled by Disney that takes care of roads, construction permits, fire protection and other infrastructure needs across 25,000 acres of company property in Orange and Osceola counties.

Outnumbered Democrats in the Florida Legislature fought the measure as unnecessary government interference and just plain bullying by the governor to score political points.

Democrats see 'socialism' in DeSantis takeover

“It’s like nationalizing a company. It’s truly socialism,” state Sen. Jason Pizzo, D-North Miami Beach, said during debate on the bill earlier this month.

Reedy Creek’s five-member, Disney-allied board, will be named by DeSantis and become the Central Florida Tourism Oversight District.

DeSantis announced his first appointments Monday, including supporters such as Sarasota County School Board member Bridget Ziegler, wife of Florida Republican Party Chair Christian Ziegler; and Seminole County lawyer Michael Sasso, president of the area chapter of The Federalist Society, the conservative legal organization.

Others include Tampa lawyer Martin Garcia, Clearwater lawyer Brian Aungst, and Ron Peri, CEO of The Gathering USA, an evangelical forum focused on faith and culture.

Clash goes back to parental rights/'Don't Say Gay' bill

DeSantis’ conflict with Disney dates to last year, when the entertainment giant opposed his parental rights legislation, tarred by critics as “Don’t Say Gay.”

The governor Monday again demonized Disney executives for trying to “inject sexuality into a lot of their programming,” a theme DeSantis and his followers deployed repeatedly during last year’s debate over the parental rights legislation.

DeSantis’ proposal banned classroom instruction on sexual orientation or gender identity in grades K-3 or in a manner not age or developmentally appropriate for students. LGBTQ rights organizations said the ban would open the door to discrimination against students, limiting even discussion about their own families.

Students across the state conducted walk-outs across campuses during last year’s legislative session to protest the parental rights measure, which was easily approved by the Republican-controlled Legislature.

While lawmakers last year also approved abolishing the Reedy Creek district by this June, fear this action would shift $700 million in district bond debt to Central Florida taxpayers sparked DeSantis and lawmakers to rework their slap at Disney during an early February special session.

The legislature during that session also attempted to fix other legal problems faced by the governor.

Indeed, measures approved then led to the dismissal of a lawsuit accusing DeSantis of misusing taxpayer money by flying 50 migrants from Texas to Massachusetts and another may help bolster his legal case for arresting 20, mostly Black ex-felons lured into illegally casting ballots during the 2020 election.

Courts had already dismissed the first three voter cases because of jurisdictional questions.

DeSantis vs. Disney:Five ways the only-in-Florida political drama could play out

DeSantis fix included in Disney bill

The Disney bill (HB 9B) also contained a needed DeSantis fix, by specifically keeping the Reedy Creek debt obligation with the district. Still, it also gives DeSantis power on the Reedy Creek board.

Reedy Creek has been around since 1967, when it was created in anticipation of the arrival of Walt Disney World in Central Florida. The company and park flourished and turned Florida into an international tourist destination, but DeSantis portrayed the policy relationship differently today.

“How do you give one theme park their own government and treat other theme parks differently?” DeSantis said Monday as justification for the change.

Florida v. Disney:Gov. Ron DeSantis wants legislature to end Disney's special status in called session

DeSantis joined with other speakers at the event, including a fire union official, Disney cast member, and longtime fan-turned-enemy of Walt Disney World, in ridiculing the company for its past COVID-19 policies, labor practices, and its inclusionary messaging, which the governor and a few speakers poisoned as “woke.”

Disney World has been restrained in its response.

“We are focused on the future and are ready to work within this new framework and we will continue to innovate, inspire and bring joy to the millions of guests who come to Florida to visit Walt Disney World each year,” Jeff Vahle, president of Walt Disney World, said after lawmakers approved the Reedy Creek re-do.

John Kennedy is a reporter in the USA TODAY Network’s Florida Capital Bureau. He can be reached at jkennedy2@gannett.com, or on Twitter at @JKennedyReport

Disney's self-governing district, Reedy Creek, says Florida cannot ...

CNN —

Disney’s self-governing special district, the Reedy Creek Improvement District, says that Florida’s move to dissolve the district next year is not legal unless the state pays off Reedy Creek’s extensive debts.

Reedy Creek is a special purpose district created by state law in May 1967 that gives The Walt Disney Company extensive governmental control over the land in and around its central Florida theme parks. With that power, Reedy Creek currently has about $1 billion in outstanding bond debt, according to the credit rating agency Fitch Ratings.

In a statement issued to its bondholders last Thursday, Reedy Creek pointed out that the 1967 law also includes a pledge from Florida to its bondholders. The law states that Florida “will not in any way impair the rights or remedies of the holders … until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged.”

Due to that pledge, Reedy Creek said it expects to continue business as usual.

“In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties,” Reedy Creek said in a statement posted to the Municipal Securities Rulemaking Board.

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The statement represents the first response from the Disney-run district since Florida Republicans moved to pass legislation that will dissolve the special purpose district on June 1, 2023. Gov. Ron DeSantis signed the legislation into law on Friday.

State officials took on the company’s self-governing status as a form of retaliation for Disney’s criticism of a law restricting discussion of LGBTQ issues in schools.

Disney has not made any direct public statements about the new law dissolving Reedy Creek. The law is just two pages long and avoids any discussion of details about how to unwind a half-century of infrastructure deals, nor does it lay out the next steps in the complicated process. Lawmakers in neighboring Orange and Osceola counties have expressed concerns that they will be stuck with paying off Reedy Creek’s debts and will have to significantly raise property taxes on residents.

“If we had to take over the first response – the public safety components for Reedy Creek – with no new revenue, that would be catastrophic for our budget here within Orange County,” Orange County Mayor Jerry L. Demings told reporters on April 21, before the official legislature vote that day. “It would put an undue burden on the rest of the taxpayers in Orange County to fill that gap.”

DeSantis has said Floridians will not see any tax increases due to the law and insisted that Disney will pay its “fair share” of taxes. He positioned the law dissolving Reedy Creek as “the first step in what’s going to be a process to make sure that Disney should not run its own government.”

How we got here

Disney, with 75,000 employees, is the largest single-site employer in Florida and is a key driver of the state’s vital tourism business. Yet its position on the law limiting LGBTQ discussion in schools earned it the ire of Republican officials.

The law, titled the “Parental Rights in Education” bill and labeled by critics as the “Don’t Say Gay” bill, prohibits schools from teaching children about sexual orientation or gender identity “in a manner that is not age-appropriate or developmentally appropriate.” The legislation also allows parents to bring lawsuits against a school district for potential violations.

The law’s vague language and the threat of parental lawsuits have raised fears that it will lead to discrimination against LGBTQ students and will have a chilling effect on classroom discussion. DeSantis’ spokesperson Christina Pushaw, however, said the legislation would protect kids from “groomers,” a slang term for pedophiles, and described those who oppose the law as “probably groomers.”

Disney CEO Bob Chapek initially declined to condemn the law but reversed course after facing employee criticism. A company spokesperson released a statement last month stating its goal is for the law to be repealed by the legislature or struck down in the courts.

“Florida’s HB 1557, also known as the ‘Don’t Say Gay’ bill, should never have passed and should never have been signed into law,” the statement said. The company said it was “dedicated to standing up for the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country.”

Earlier last week, DeSantis challenged lawmakers to unravel the 55-year-old Reedy Creek Improvement Act as part of a special legislative session. The impact of that legislation – as well as its legality – remains unclear.

Jamiel Lynch Chris Boyette Eric Levenson

DeSantis vs. Disney: Bill to strip self-governing status to governor

James Call

Capital Bureau | USA TODAY NETWORK - FLORIDA

After an unprecedented hour-and-eight-minute disruption by House Democrats, Florida House Republicans steamrolled Democrats protesting a redistricting bill to approve the dissolution of a special taxing district that allows the Walt Disney Co. to self-govern its theme-park area.

The measure now goes to Gov. Ron DeSantis for approval.

Lawmakers voted 70-38 to back the measure while Rep. Travaris L. McCurdy, D-Orlando, led Democrats in chants of "Stop the Black attack," in protest of a just passed redistricting bill that election experts say will eliminate two Black-access congressional districts.

The Senate previously approved the proposal 23-16, to repeal the Reedy Creek Improvement District with Republican St. Petersburg Sen. Jeff Brandes voting with Democrats.

The redistricting protest prevented floor debate on the measure. In a chaotic seven minutes, the House approved new congressional maps and repealed legislation that had enabled Disney to build the world's number one tourism attraction in Florida.

"What you saw is that the Speaker was in a situation that frankly, he couldn't control," said Rep. Fentrice Driskell, D-Tampa.

"What you saw was an acceleration of the process that we've seen all session long, which is just to move things through. We've never had enough time to debate," said Driskell.

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SB 4 dissolves Disney's Reedy Creek Improvement District on June 1 of next year. The district, created by state law in 1967, exempts 38 miles of land Disney owns from most state and local regulations and allows Disney to collect taxes, follow its own building codes and provide emergency services for its six theme parks and resorts.

House sponsor Rep. Randy Fine, R-Brevard, said the special district designation provides an unfair competitive advantage over other tourist attractions.

"We provide Disney things that we do not provide to their competitors. And that's fundamentally unfair," said Fine.

"Universal is building a third theme park. We're not going to create the Woody Woodpecker Improvement District. They have to compete with one hand tied behind their backs," said Fine.

Disney is Central Florida’s chief economic engine, a 2019 study by Oxford Economics calculates the company’s 38-mile-long empire of six theme parks, resorts and other enterprises produces $5.8 billion in state tax revenue from $75 billion in economic activity that supports 463,000 jobs.

"What is he thinking? He's going to hurt our economy. He's going to hurt tourism. The notion that he's going after all those jobs, shame on him," said Congressman Charlie Crist, a Democratic candidate for governor, Tuesday at the Capitol minutes after Fine filed the proposal.

Disney has declined to comment.

Disney vs. DeSantis:

Democrats dismissed the GOP's free-market argument as so much smoke to conceal a Republicans rush to punish an iconic Florida corporation for its political speech.

It took lawmakers two days to produce, debate and adopt the proposal after Gov. Ron DeSantis said he wanted the Legislature to repeal the governing structure Disney employed to create a Central Florida entertainment empire.

“We’ve never spent an hour on this,” said Rep. Joseph Geller, D-Aventura, adding the Republican repeal effort was “disrespectful of the legislative process.”

“They don’t even have a real fiscal or economic analysis. We should not tolerate this,” said Geller.

Disney became ensnared in a culture war flareup when CEO Bob Chapek vowed to work to repeal the Parental Rights in Education Act – which opponents dubbed the “Don’t Say Gay” bill.

The measure prohibits classroom instruction on sexual and gender identity through third grade and limits to “age-appropriate” materials in later grades with a provision to enable parents to sue for damages if a school is found in violation.

DeSantis immediately slammed Disney as a “woke” corporation repeating “left-wing propaganda.”

Chapek responded with an announcement that Disney would stop contributing to political campaigns because of the controversy.

The company directly contributed $5 million to Florida candidates in 2020, according to state records – but it is hard to see its total influence in campaigns given the number of corporate entities that are part of the Disney family, the plethora of political action committees and their reporting requirements, and the number of candidates.

Six weeks after Chapek’s announcement, lawmakers went into special session and approved SB 4, repealing Reedy Creek and five other special districts for not having complied with a 1997 law to seek recodification.

While lawmakers debated the bill, DeSantis sent out a fundraising letter stating Disney had picked a fight with “the wrong guy” and called for contributions to “fight against the Democratic machine and woke Disney executives.”

“Look, you can’t go on national TV, have press conferences, be on Twitter talking about woke Disney and then come into a committee room and act like this bill and all that are not completely connected. I mean, let’s just be real,” said the AFL-CIO's Rich Templin, testifying against the measure during the proposal’s only committee stop.

Templin represents 40,000 union members working at Disney and Reedy Creek. He describes them as collateral damage in a culture war, a group whose economic future is suddenly at risk.

Democrats charge that DeSantis, and the GOP-led Legislature placed those jobs in jeopardy and threaten to saddle Orange and Osceola counties with billions of dollars in Reedy Creek debt and other obligations to bolster DeSantis’ reelection campaign and possible presidential run.

“It shows the deep selfishness and the deep blind political ambition that this governor has. That he’s willing to do this on the backs of working people is unconscionable,” said Rep. Michelle Rayner, D-Tampa.

Fine and Republicans counter that the Legislature and Disney will have a year to work on the dissolution of Reedy Creek and prevent what the Senate sponsor called the Democrats’ “parade of horribles.”

The measure would go into effect in June 2023.

Fine said that gives Disney more than enough time to “consider how they behave,” and seek recodification of Reedy Creek if they want to retain the “special privileges” Florida has given it.

“This is unhinged authoritarianism. This is about retribution. They are using the power of government to punish anyone who speaks out against them,” said Rep. Carlos Guillermo Smith, D-Orlando.

James Call is a member of the USA TODAY NETWORK-Florida Capital Bureau. He can be reached at jcall@tallahassee.com. Follow on him Twitter: @CallTallahassee

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Florida Gov. Ron DeSantis moves against Disney with push to ...

CNN —

Florida Gov. Ron DeSantis escalated his weeks-long feud with Disney on Tuesday, challenging lawmakers to eliminate the unique status that allows the entertainment company to operate as an independent government around its Orlando-area theme parks.

Within hours, Republican lawmakers delivered, quickly advancing a pair of bills targeting Disney over its objections to a new law limiting classroom instruction on sexual orientation and gender identity.

“Once upon a time Disney was a great partner with the state of Florida,” said Rep. Jackie Toledo, a Tampa Republican. “We’ve granted them privileges because of our shared history, shared goals and shared successes. Shamefully, Disney betrayed us.”

It now appears almost certain that by the end of the week, the long-standing symbiotic arrangement that helped grow Disney into an iconic entertainment brand and Florida into an international travel destination could be dissolved.

Democrats accused Republicans of retaliating against Florida’s largest private employer in ways that will reverberate throughout the state’s important tourism economy.

“Punishing a company for daring to speak against a governor’s radical right political agenda is precisely the kinds of things that we see in countries like Russia and China,” said state Rep. Dotie Joseph, a Democrat from the Miami area.

Disney did not respond to a request for comment on Tuesday.

Bill would unravel decades-old law

The blow to Disney is coming in the form of a bill to unravel the 55-year-old Reedy Creek Improvement Act, a unique Florida law that helped establish Walt Disney World in the state by giving the brains behind Mickey Mouse operational autonomy.

GOP-controlled committees in the state House and Senate voted in favor of a bill that would end the special district on June 1, 2023.

Another bill, to subject Disney to a state law that allows people to sue Big Tech companies for censorship, also passed out of initial committees Tuesday afternoon. Disney had won an exemption from the bill last year. A federal judge has blocked the law but Florida is appealing the ruling.

The votes came hours after DeSantis, in a surprise bombshell announcement, called on lawmakers to sunset the Reedy Creek Improvement Act. Lawmakers had already been scheduled to meet in Tallahassee this week to pass new congressional maps.

Republicans in Florida and Disney have been at odds for months over legislation that prohibits schools from teaching young children about sexual orientation or gender identity. After initially declining to weigh in, Disney CEO Bob Chapek publicly criticized Florida lawmakers for passing what opponents called the “Don’t Say Gay” bill and apologized to the company’s LGBTQ employees for not being a stronger advocate.

Chapek announced that the company would stop making political donations in Florida after decades of contributing generously, mostly to Republicans, including a $50,000 donation to DeSantis’ reelection effort.

DeSantis ripped Disney as a “woke corporation” and criticized its business in China. After DeSantis signed the bill, Disney wrote in a statement that its “goal” was to get the law repealed or see it defeated in the courts.

Despite the rising tensions, few expected Florida Republicans would take the unimaginable step of undercutting the business of its most iconic company. The Reedy Creek Improvement District covers Disney’s properties near Orlando, allowing the company to manage land within its boundaries and provide its own public services, such as firefighting and police. There are also significant tax advantages for Disney in the arrangement.

But DeSantis, widely seen as a 2024 presidential contender, has vowed to challenge any business that steps into the political arena to support progressive causes. He has been joined in the fight by Fox’s prime-time hosts, who have taken turns criticizing Disney and enlisting people to turn their backs on Mickey Mouse.

Last month, DeSantis signaled support for stripping Disney of its sacred status.

“Disney has alienated a lot of people now,” DeSantis said. “And so, the political influence they’re used to wielding, I think has dissipated. And so the question is, why would you want to have special privileges in the law at all? And I don’t think that we should.”

Given the choice between DeSantis, their party’s most popular elected leader, and Disney, the state’s most iconic company, it was clear Tuesday that Republican lawmakers have sided with DeSantis.

“You kick the hornet’s nest, things come up,” state Rep. Randy Fine, the Republican sponsor of the bill, said before the measure passed the House State Affairs Committee by 14-7. “This bill does target one company. It targets Walt Disney Company. You want to know why? Because they’re the only company in the state that has ever been granted the right to govern themselves.”

Next steps unclear

It’s not clear what dominoes will fall next if lawmakers proceed. Fine said he has not spoken with Disney or the surrounding cities and counties that would likely have to take up the government functions that the company has operated for decades. He said Disney and other stakeholders have a year to come up with a plan. He didn’t rule out altering and extending the Reedy Creek Improvement District when lawmakers meet in 2023.

Disney’s unique arrangement in Florida has not been without its detractors over the years. Some have complained that the company does not pay its fair share of taxes. Others have said it’s received an unfair advantage over the competition.

But Democrats said Republicans were rushing into a plan out of retaliation, not sound policy. They said the bill as written contradicts an existing state law that says a majority of residents must vote to eliminate a special district – which is mostly Disney employees in Reedy Creek.

“Reedy Creek has a budget of over $350 million; they have debt of almost a billion dollars,” said state Sen. Randolph Bracy. “Orange County, central Florida residents would have to absorb all that debt, and it is something that we cannot handle. So I think it’s appropriate to say that this legislation is unnecessary but also it is clearly retribution.”

Ron DeSantis signals support for stripping Disney of special self ...

CNN Business —

Florida Gov. Ron DeSantis on Thursday signaled support for stripping Disney of its 55-year-old special status that allows the entertainment company to operate as an independent government around its Orlando-area theme park.

It’s the latest fallout in the feud between DeSantis, a Republican widely seen as a potential 2024 presidential contender, and Disney (DIS), Florida’s largest private employer, over a measure that bans schools from teaching young children about sexual orientation or gender identity.

After DeSantis signed the bill into law earlier Monday, the Walt Disney Company wrote in a statement that its “goal” was to get the law repealed or defeated in the courts.

DeSantis previously said Disney “crossed the line” with that statement. On Thursday, DeSantis went further, suggesting Disney’s “special privileges” could be lifted.

“Disney has alienated a lot of people now,” DeSantis said at a West Palm Beach press conference. “And so the political influence they’re used to wielding, I think has dissipated. And so the question is, why would you want to have special privileges in the law at all? And I don’t think that that we should.”

DeSantis’ remarks follow a revelation that some Republican state lawmakers are considering repealing a 1967 state law that established the Reedy Creek Improvement District, giving Disney the power to establish its own government in central Florida.

“Yesterday was the 2nd meeting in a week [with] fellow legislators to discuss a repeal of the 1967 Reedy Creek Improvement Act, which allows Disney to act as its own government,” state Rep. Spencer Roach, a Republican, wrote Wednesday on Twitter. “If Disney wants to embrace woke ideology, it seems fitting that they should be regulated by Orange County.”

Lawmakers recently concluded their legislative business for the year and would not be able to repeal the act until they meet again next year, unless DeSantis or legislative leaders convene a special session to address it.

Reedy Creek: What might happen next in Florida's attempt to end ...

CNN —

Nearly 55 years ago, Florida passed a law that created the Reedy Creek Improvement District, effectively giving The Walt Disney Company governmental control over the land in and around its central Florida theme parks.

Yet over the course of just a few days last week, Republican legislators – in response to Disney’s criticism of a law restricting discussion of LGBTQ issues in schools – drafted and passed a bill dissolving that special purpose district on June 1, 2023. Florida Gov. Ron DeSantis signed the legislation into law on Friday.

The new law is just two pages long and avoids any discussion of details about how to unwind a half-century of infrastructure deals, nor does it lay out the next steps in the complicated process.

The lack of a concrete plan surprised and frustrated state lawmakers in Orange and Osceola counties, who suddenly realized their taxpayers could be on the hook for funding basic services and paying off Disney’s nearly $1 billion of debt.

“They’re trying to unwind a whole municipal government in five days,” said Eleanor Wilking, an assistant professor at Cornell Law School studying tax policy. “The details are not trivial.”

CNN spoke to a handful of experts and lawmakers to try to understand what’s next for Florida, Disney and Reedy Creek. Their answers were wary and speculative because, they said, the law itself offered few clues. Disney, too, has been conspicuously silent over the past week.

Broadly, though, they suggested there were three potential paths ahead: One, inertia rules the day and local counties are stuck with a big tax bill; two, Disney files suit to stop the dissolution; or three, Disney and Florida renegotiate a new special district.

“It really just depends on what Disney does and what the legislature does,” said Aubrey Jewett, associate professor at University of Central Florida and co-author of the book “Politics in Florida.” “If neither of them does much, then it falls to the local governments to sort out this mess.”

Option 1: Orange and Osceola counties will pick up the bill

If nothing else changes, and Reedy Creek is dissolved in June 2023, then Orange and Osceola counties could be on the hook for significant cost increases.

Reedy Creek is important to Disney because it gives them greater control over their parks, said Richard Foglesong, the author of the book “Married to the Mouse: Walt Disney World and Orlando.” Reedy Creek, whose budget comes almost entirely from Disney, pays for its own fire department, water systems, roadways and building inspectors, and it can issue bonds and take on debt to pay for long-term infrastructure programs.

But if Reedy Creek is dissolved, those expenses and debt payments would be absorbed by neighboring Orange and Osceola counties. The Senate bill analysis noted that the new law will have an “indeterminate fiscal impact” on the counties.

Officials in Orange County said they’ll likely have to raise property taxes on their residents. Orange County tax collector Scott Randolph told CNN on Saturday that residents could be hit with a $163 million a year tax bill when the district is dissolved.

“All of that debt and obligation goes over to Orange County the minute that Reedy Creek is dissolved,” he said. He said paying that off could mean a property tax increase of 20% to 25% on homeowners. (Florida does not have a personal income tax.)

State Sen. Linda Stewart, a Democrat who represents part of Orange County, told CNN on Monday there was conflicting information about what this would mean for county taxpayers. Orange County is working on releasing a more realistic breakdown of the potential impact in the next few days, she said.

Still, she’s already hearing from frustrated constituents concerned that their property taxes will be going up.

“We’ve got inflation, we’ve got (high) gas prices, and now we’re gonna add in a huge tax bill too? No, that is not acceptable,” she said.

Option 2: Disney takes Florida to court

Video Ad Feedback What happens if Disney loses its special tax status in Florida? 06:29 - Source: CNN

A second potential path ahead is that Disney sues to block the law from taking effect.

One line of argument may be that the dissolution does not follow state law. According to Florida Statute 189.072, dissolving a special district requires approval by a majority of landowners. The land of Reedy Creek is mostly owned by Disney.

The bill passed last week takes that into account, saying that, “Notwithstanding 189.072,” any special district established before 1968 will be dissolved next year. Does including the word “notwithstanding” mean that the prior law doesn’t apply?

In debating the bill last week, Rep. Randy Fine, a Republican, said the “notwithstanding” line passes legal muster.

“These are not constitutional requirements. These are statutory requirements. And this bill actually changes the law, which we’re allowed to do at any time, and says that we don’t have to do those things,” he said.

To which state Rep. Dotie Joseph, a Democrat, responded: “I think to change the law that exists you would repeal it, not just put another one that contravenes it, but what do I know? I’m just a lawyer.”

Another potential lawsuit could be on free speech grounds. Though the new law does not specifically mention Disney or Reedy Creek, Florida Republicans publicly said the law was in response to the company’s criticism of the “Parental Rights in Education” bill, which critics have termed the “Don’t Say Gay” bill.

That state legislation, signed into law last month, prohibits schools from teaching children about sexual orientation or gender identity “in a manner that is not age-appropriate or developmentally appropriate.” After an employee uproar, Disney stated that the company’s goal was for the law to be repealed or struck down in the courts, earning the enmity of right-wing lawmakers.

“They are a California company that is a guest in the state of Florida,” Fine said on CNN last week. “And they are a guest that has had special privileges that no other company has had. If you want special privileges, you’d better be on your best behavior.”

Disney could sue and argue that the law was an unconstitutional punishment for corporate political speech.

“All of this boils down to a spiteful Disney approach that (Republicans) didn’t like what Disney had the freedom of speech to say,” Stewart said. “People have freedom of speech, so do corporations. They’re not excluded from having freedom of speech.”

Finally, Disney might not even be the only one to sue the state. Tax attorney Jacob Schumer argued that Florida had promised Reedy Creek bondholders that the state wouldn’t interfere with the district’s bonds. Dissolving Reedy Creek would violate this contractual agreement, he argued.

“Florida simply cannot promise to prospective bondholders that it won’t interfere with Reedy Creek, and then dissolve Reedy Creek,” he wrote on BloombergTax.com.

Reedy Creek itself highlighted this issue in a statement to bondholders last week, prior to the law’s signing. Citing that aspect of the law, the district said it expects to continue business as usual.

“In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties,” Reedy Creek said.

Fitch Ratings, the credit rating agency, put Reedy Creek on “Negative Watch,” meaning that there is a potential for the rating on their debt to be downgraded. Analyst Michael Rinaldi told CNN the uncertainty of the law was to blame, as the two-page bill did not lay out the process of what happens to nearly $1 billion in debt when the district is dissolved.

“We’re in no man’s land with respect to where things go,” he said.

Option 3: Disney and Florida renegotiate a new special district

The final path ahead – and the one that most lawmakers and experts mentioned – is that Disney and Florida renegotiate terms on a new special district with more limited powers the day that Reedy Creek dissolves.

The law passed last week explicitly allows for just such an agreement. “An independent special district affected by this subsection may be reestablished on or after June 1, 2023,” the law states.

DeSantis said as much on Monday, saying that the dissolution bill passed last week is “the first step in what’s going to be a process to make sure that Disney should not run its own government.”

He insisted that Disney would still pay taxes and its debts.

“Trust me, under no circumstances will Disney not pay its fair share of taxes,” he said.

“Under no circumstances will Disney be able to not pay its debts. We will make sure of that,” he added.

Stewart said they could renegotiate on small things, such as ensuring Disney does not start fracking or build a nuclear power plant in the special district. That would allow Disney to keep most of its powers while also allowing DeSantis to maintain his right-wing credibility.

“I don’t think that anybody is going to go the full route of dissolving Reedy Creek,” she said. “There may be a couple of things we can do (to negotiate). Whether that will be enough for the governor to save face with, I don’t know. I can’t read his mind. Nobody can.”

Wilking, the tax policy expert, said that any negotiation on the special district misses the broader issues at play: The culture wars have come for big business.

“The bigger issue really is this idea that DeSantis and the Florida legislature are willing to really go head-to-head with these really large and locally significant businesses in order to prosecute their preferred cultural agenda,” she said. “That’s the real story in my opinion. The taxes are less important than the loss of control for Disney.”

Eric Levenson Steve Contorno
Eric Levenson
Steve Contorno

Is Disney leaving Florida? How company might respond to Reedy ...

The Walt Disney Co. has been silent this past week over the Florida Legislature's action to repeal the Reedy Creek Improvement District. That's the governing structure for Disney's Orlando-area properties.

That silence leaves much unknown about how Disney will respond, and what its next steps will be. Under the legislation, the move would take effect in June 2023.

The Legislature's action came in response to Disney criticism over the “Parental Rights in Education Act" that Gov. Ron DeSantis signed into law in March. The measure — which critics term the "Don't Say Gay" bill — includes provisions that limit instruction about gender identity and sexual orientation in grades K-3.

Is the magic still there? Disney fans react to feud with DeSantis, Florida lawmakers

A smaller world for Disney? Florida lawmakers revoke special self-governing status

Who is Randy Fine? Brevard Republican lawmaker's fight with Disney is only his latest battle in culture wars

The company responded to the fallout from Disney employees and stockholders — both in an open letter to employees and during the company's annual stockholders' meeting. DeSantis and lawmakers took notice.

Here's what we know about what transpired:

What was Disney's initial approach?

Disney Chief Executive Officer Bob Chapek has taken criticism in recent months from some employees and shareholders over what his critics felt was Disney's muted response in opposing the Parental Rights in Education Act.

Chapek last month sent a message addressed to Disney employees — "but especially our LGBTQ+ community" — about the legislation.

"Speaking to you, reading your messages and meeting with you have helped me better understand how painful our silence was," Chapek said. "It is clear that this is not just an issue about a bill in Florida, but instead yet another challenge to basic human rights. You needed me to be a stronger ally in the fight for equal rights, and I let you down. I am sorry. We need to use our influence to promote that good by telling inclusive stories, but also by standing up for the rights of all."

Why was Disney initially silent in its opposition to the legislation?

Chapek read a statement at the company's annual stockholders' meeting that explaining that tactic.

"We were opposed to the bill from the outset, but we chose not to take a public position on it, because we thought we could be more effective working behind the scenes, engaging directly with lawmakers on both sides of the aisle," Chapek told stockholders. "And we were hopeful that our long-standing relationships with those lawmakers would enable us to achieve a better outcome. But despite weeks of effort, we were ultimately unsuccessful. Certainly, the outcome in Florida was not what many of us were hoping for, especially our LGBTQ+ employees."

How did Disney stockholders react?

Some stockholders on both sides of the issue were not pleased with the company's efforts — and expressed those views during the shareholder question-and-answer portion of the meeting.

One stockholder questioned why Chapek and a group of LGBTQ+ employees were planning to meet with DeSantis, when the governor's views were clear on the legislation.

Another read into the meeting record comments from his daughter — a Disney employee — who felt the company did not do enough to fight the legislation; should not have donated to politicians who supported the bill; and does not have enough of an LGBTQ+ representation in its mainstream Disney shows and movies. She termed Disney's initial efforts on the legislation "beyond disappointing."

In contrast, another stockholder complained to Chapek that "your recent Magical Pride Days and your upcoming LGBTQ Pride March this year is a blatant attempt at indoctrinating children and attendees towards a certain political ideology." He also expressed concern that transgender themes are getting into Disney creative content.

"My question to you today is: Would it not be beneficial both to you and the millions of Disney lovers around the world to ditch the politicization and gender ideology from your content aimed at children, and instead try to win back the trust of families by sliding away from politics altogether? And reverting back to the magic and innocence that has been the founding motive for its success?"

What did Disney CEO Bob Chapek say about those criticisms?

"I think all the participants in today's call can see how difficult it is to try to thread the needle between the extreme polarization of political viewpoints we have as shareholders," he told shareholders. "Certainly, our shareholders follow the general distribution of our audience in general and America and the globe, in terms of having different points of view."

So what does Disney plan to do now?

Chapek has announced a multifaceted approach to addressing the issues. Among its efforts, Disney is taking action to combat the spread of legislation like the Parental Rights in Education Act approved by the Florida Legislature and signed into law by DeSantis.

Chapek said Disney is:

Increasing its support for advocacy groups to combat similar legislation in other states, including signing the Human Rights Campaign's statement opposing such legislative efforts.

Pledging $5 million to organizations working to protect LGBTQ+ rights.

Working to create "a new framework for our political giving that will ensure our advocacy better reflects our values."

Halting political donations in Florida, pending this review.

How is Disney trying to unify its customers?

Chapek said Disney likes "to celebrate those different points of view, but, really, what we want Disney to be is a place where people can come together and place their differences aside, and it's my goal to make sure that that continues to be the case, where Disney is a unifying force, not a divisive force. My opinion is that when someone walks down Main Street and comes in the gates of our parks, they put their differences aside, and they look at what they have as a shared belief — a shared belief of Disney magic, hopes, dreams and imagination and bringing people together."

What does Chapek think about Disney's relations with the LGBTQ+ community?

"We stand with our LGBTQ+ community going forward, and will continue to make an impact," Chapek said at the shareholder meeting.

"I truly believe we are an infinitely better and stronger company because of our LGBTQ+ community." Chapek told employees in his email. "I missed the mark in this case, but am an ally you can count on — and I will be an outspoken champion for the protections, visibility and opportunity you deserve."

Dave Berman is business editor at FLORIDA TODAY. Contact Berman at dberman@floridatoday.com. Twitter: @bydaveberman.

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DeSantis signs bill restricting how Florida schools and businesses ...

CNN —

Florida Gov. Ron DeSantis on Friday signed several bills into law, including two measures targeting Disney, legislation that will put new restrictions on how schools and businesses can talk about race and gender, and the state’s new congressional map.

The bills targeting Disney were passed by the state’s Republican-controlled legislature this week in a special session, taking aim at the company’s self-governing status around its Orlando-area theme parks and ending an exemption to state law regarding Big Tech censorship.

Florida lawmakers also this week passed the state’s new congressional map, which was proposed by DeSantis himself and that critics say dilutes the electoral power of Black Floridians and could give Republicans the advantage in as many as 20 of the state’s 28 districts.

The bill restricting how schools and businesses can talk about race and gender was passed by lawmakers last month. It says a student and employee cannot be told they “must feel guilt, anguish, or other forms of psychological distress because of actions, in which the individual played no part, committed in the past by other members of the same race, color, sex, or national origin.”

Disney’s special status upended

One of the bills signed by DeSantis unravels the nearly 55-year-old Reedy Creek Improvement Act, a unique Florida law that helped establish Walt Disney World in the state by giving the brains behind Mickey Mouse operational autonomy.

The new law will end the special district on June 1, 2023.

Another bill signed by DeSantis subjects Disney to a state law that allows people to sue Big Tech companies for censorship after Disney won an exemption from it last year. A federal judge has blocked the law, but Florida is appealing the ruling.

The pair of bills represent an unprecedented political retaliation against Disney for its criticism of the Parental Rights in Education bill, which critics have termed the “Don’t Say Gay” bill.

Disney has not responded to CNN requests for comment.

Florida Democrats have been outspoken against the bills, accusing Republicans of retaliating against the state’s largest private employer in ways that will reverberate throughout the Sunshine State’s important tourism economy.

New congressional map

The map signed by DeSantis could help Republicans gain up to four seats in the US House of Representatives this November.

It dismantles Florida’s 5th Congressional District, currently represented by Democrat Al Lawson, which connects Black communities from Tallahassee to Jacksonville. Instead, Jacksonville, the city with the largest African American population in the state, is divided into two Republican-leaning districts.

The final product would also shift Florida’s 10th Congressional District – an Orlando-area seat represented by Val Demings, a Black Democrat now running for US Senate – east toward Whiter communities.

DeSantis has contended those districts were racially gerrymandered and has suggested they are unconstitutional.

A coalition of civil rights groups on Friday filed the first lawsuit against the new map, contending it was a Republican gerrymander that violated the state Constitution by diminishing the power of Black voters. A state constitutional amendment known as Fair Districts, approved by voters in 2010, requires lawmakers to give minority communities an opportunity to “elect representatives of their choice.”

Several Black members of the Florida House staged a protest during debate Thursday, forcing an informal recess before Republican members continued the process by ending debate and holding the vote during their protest.

The Republican-controlled state House and Senate had initially sought to maintain the state’s four Black congressional districts. DeSantis threatened to veto those proposals.

The House and Senate passed their own map in March over the governor’s objections. DeSantis vetoed it and called lawmakers back to Tallahassee for a special session to address the issue. Republican leaders in the House and Senate then made the decision this month to let the governor take the lead.

DeSantis’ foray into the once-a-decade redistricting process is unusual. None of his immediate predecessors were especially involved in reapportioning state boundaries. It was a surprise to Tallahassee, including Republicans, when the governor’s office in January submitted a map for the lawmakers to consider.

Republicans currently hold a 16-11 advantage in Florida’s US House delegation. The state added a 28th district following the 2020 US census.

New law limits how race can be discussed in classrooms

In signing the bill that will put new restrictions on how schools and businesses can talk about race and gender, DeSantis realized one of his top objectives heading into his reelection campaign. In December, he had proposed the Stop the Wrongs to Our Kids and Employees (W.O.K.E.) Act to remove certain teachings about race from school curricula and employee trainings. Specifically, DeSantis called for a banning of critical race theory and similar concepts.

That proposal became the legislative framework for HB 7, which passed the Republican-controlled legislature earlier this year.

The legislation DeSantis signed does not specifically mention critical race theory, which acknowledges that racism is both systemic and institutional in American society and has benefited White people and oppressed Black and brown Americans. A bill analysis by state Senate staff, however, highlights the teaching of critical race theory as something that would be prohibited under the legislation.

The newly signed legislation was swiftly challenged in a federal lawsuit filed on Friday that argues the law violates First Amendment and 14th Amendment rights and seeks an injunction to stop it from going into effect.

Attorneys for the plaintiffs in the suit – an upcoming kindergarten student, two Florida teachers, a University of Central Florida associate professor, and a race and ethnicity consultant – said, “This legislation prohibits Florida’s K-12 schoolteachers, college and university professors, and employers from espousing, endorsing, or advancing a wide range of viewpoints on important issues about race in America, such as institutional racism and implicit bias,” in a news release shared with CNN on Friday.

A spokesperson for the governor told CNN they have not had a chance to review the lawsuit yet but are confident the bill is legal.

“The law protects students and workers from discriminatory indoctrination. Nobody should be compelled to undergo trainings or lectures that stereotype individuals based on race or other innate characteristics,” said Christina Pushaw, DeSantis’ spokesperson.

“No one is teaching critical race theory,” state Sen. Audrey Gibson, a Black Democrat from Jacksonville, said the day the bill passed in that chamber. “This is a bill in search of a problem that we don’t have.”

“This is politically driven,” she added. “This is designed to create division.”

Democratic lawmakers have expressed concern that such a law could lead to schools desensitizing history, including the Jim Crow era, the internment of Japanese Americans during World War II and the Stonewall riots.

The bill DeSantis signed says schools can teach about slavery and the history of racial segregation and discrimination in an “age-appropriate manner,” but the instruction cannot “indoctrinate or persuade students to a particular point of view.”

The new law also says that students “shall develop an understanding of the ramifications of prejudice, racism, and stereotyping on individual freedoms, and examine what it means to be a responsible and respectful person” and “celebrate the inspirational stories of African Americans who prospered, even in the most difficult circumstances.”

The law is set to go into effect on July 1.

This story has been updated with further developments Friday.

Dianne Gallagher Steve Contorno Jon Passantino


Ten Things You Need to Know Today: 18 May 2022 | The Week UK

Cooking oil price rises by 40%

Cooking oil is one of the goods to jump most in price this year, going up by 18% in the last year on average across all variations, reported The Telegraph. Rapeseed oil and coconut oil prices have risen by more than 40%, while sunflower oil and vegetable oil have gone up by 39%. Dairy products have also risen sharply along with pasta, which has soared in price by 16.2% compared with 2021. One item, add the paper, has more than quadrupled in price since May 2021: the price of Morrisons’s apple crumble has gone up by 341%.

Food pop-ups of the future: A look at Greenville SC virtual restaurants

Tye Cantrell’s Hawaiian street food concept really began because he wanted to buy his wife, Julie a Christmas tree. The trees, at least the really nice ones, cost a lot of money, money that the family with Cantrell’s executive sous chef and Julie’s hairdresser salaries, just didn’t have. But last year, the thrice handed down tree had to be tossed, and so this year, Cantrell vowed he’d find a way to get his wife, Julie the tree she’d always wanted.

Boris Johnson's go-to boast on UK GDP obscures the painful truth ...

London CNN Business —

Prime Minister Boris Johnson is fond of saying the United Kingdom has the fastest growing economy in the G7.

The prime minister can back up his claim with data published by Britain’s Office for National Statistics (ONS) on Friday, which showed the United Kingdom had the fastest growing economy of the Group of Seven nations over last year as a whole.

UK gross domestic product — the broadest measure of economic activity — grew by 7.5% as activity bounced back with the lifting of coronavirus restrictions.

But those figures don’t tell the whole story. The growth numbers are pumped up because the United Kingdom endured the deepest recession of any major developed economy in 2020 and its worst performance since 1921, providing a lower base for subsequent comparison.

Johnson’s boast also doesn’t reflect what happened in the final three months of last year. UK GDP expanded 1% in the fourth quarter, according to ONS data published Friday. That trailed the United States (1.7%) and Canada (1.6%), which are both in the G7.

Even those statistics obscure a larger truth: the United Kingdom is hurtling toward its worst cost of living crisis in 30 years, the Bank of England expects unemployment to rise next year and growth to be “subdued,” taxes are going up and new post-Brexit import controls could slam foreign trade.

Short-term economic indicators have also been exceptionally volatile, reflecting the stop-start nature of business as coronavirus restrictions have come and gone. A better way to measure performance is to compare current economic output with levels before the pandemic arrived. Here, the United Kingdom is languishing near the middle of the G7 ranking.

In the fourth quarter of 2021, the UK economy was still 0.4% smaller than it was before the pandemic struck, according to the ONS. By the same measure, the US economy has expanded 3.1%, while France and Canada have grown by 0.9% and 0.2%, respectively.

The German and Italian economies have not yet achieved their pre-pandemic size, and comparable data for Japan is not yet available.

Johnson may be able to repeat his G7 claim without being slapped down by fact checkers. But it’s less likely to land well with the British people, whose average disposable incomes after tax are forecast to decline by 2% this year.

UK inflation hit 5.4% in December, its highest rate since 1992, according to official statistics released last month. Wages advanced at an annual rate of just 3.8% in December, leaving households with less purchasing power.

A volunteer collects donated items from shelving racks at a food bank in Colchester, England, on January 20. Ben Stansall/AFP/Getty Images

Brits are already feeling rising costs. Some 85% of people have noticed an increase in the costs of groceries, according to a January survey conducted by YouGov. Roughly 35% say their housing costs, including rent and mortgages, have risen. Nearly 75% have noticed higher fuel prices.

The cost of living crisis is about to get much worse.

The Bank of the England expects inflation to surge higher over the coming months and peak at 7.25% in April. In early February, the central bank hiked interest rates for a second time in three months in an effort to rein in rising prices, increasing pressure on homeowners with variable rate mortgages. More interest rate hikes are expected later this year.

“We are facing a squeeze on real incomes this year,” central bank boss Andrew Bailey told reporters last week. “It is necessary for us to … raise interest rates because if we don’t do that, we think that the effects will be worse.”

Energy bills will go even higher in April, when regulators increase a cap on how much consumers can be charged to heat and light their homes by 54%.

The change means that the typical consumer will see their energy bills increase by £693 ($939) to £1,971 ($2,670) per year. Some of that will be offset by a cut in local taxes, and a discount that will have to be repaid over 5 years.

The Joseph Rowntree Foundation said some families on low incomes would face annual bills as high as £2,326 ($3,152) from April, while the Resolution Foundation warned that the number of households in “fuel stress” — those spending more than 10% of the family budget on energy — would double to 5 million.

British Prime Minister Boris Johnson leaves 10 Downing Street on February 9. Matt Dunham/AP

Other government policies are adding to the burden on households.

Johnson is pushing ahead with plans to hike the National Insurance payroll tax in April in order to fund health and social care. The hike should help the elderly, but the tax is regressive, meaning higher earners pay a lower marginal rate than the poor.

And in early October, the government cut Universal Credit — a benefit claimed by those out-of-work or earning low incomes — back to its pre-pandemic level. More than 5.8 million people lost £20 ($28) a week, although the government later boosted the income of some people who work and receive the benefit.

One more big economic risk looms. The government has yet to implement fully the border checks that are needed as a result of Brexit, and there is considerable doubt over whether preparations are on track despite three previous delays.

The UK Parliament’s influential Public Accounts Committee said this week that “there remains much to be done to introduce import controls.” The trade group Logistics UK echoed that assessment, warning that delays at the border could cause a backup of trucks that would stretch for 29 miles.

Taken together, the combination of spiraling costs, taxes and risks to trade leave the prime minister with little reason to boast about the state of the UK economy.