Florida Republicans Want to Punish Disney for Opposing the ‘Don’t Say Gay Law.’ Here’s What That Means for the Company

Florida’s GOP-led House has voted in favor of a bill that would effectively punish Disney for its opposition to the state’s “Don’t Say Gay” law. The measure proposes to strip the company of protections within a special Orlando-area taxing district that have allowed its theme park to self-govern for nearly six decades.

Thursday’s vote sends the measure to Republican Gov. Ron DeSantis to be signed into law. The state’s Senate passed the bill earlier this week.

DeSantis introduced the bill in what was widely seen as retaliation against Disney’s opposition to what critics are calling a discriminatory legislative measure, as it bans LGBTQ teaching in primary schools.
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The new legislative proposal would be a blow to Disney, since its theme park and resort have benefited from limited red tape and exemptions from certain taxes for 55 years within the special taxing district. It could also hurt local taxpayers, who could lose out from the district’s dissolution.

Why is Gov. DeSantis targeting Disney?

Disney angered Republican lawmakers when the company’s chief executive, Bob Chapek, said in a shareholder meeting March 9 that he had called DeSantis to “express our disappointment and concern that if legislation becomes law, it could be used to unfairly target gay lesbian, nonbinary and transgender kids and families.” Chapek also announced that Disney would review the political donations it makes to Republican lawmakers who supported the bill.

Read more: Florida Just Passed the “Don’t Say Gay” Bill. Here’s What It Means for Kids

The proposed law highlights the confluence of two national trends: A deeper involvement of companies in social-political discourse and a growing eagerness among lawmakers to strike blows against corporations with legislative measures. As more socially-conscious younger generations demand higher levels of corporate responsibility, employers like Disney are forced to balance their needs with the conservative views of some Republican lawmakers. Last year, after Texas enacted a law banning abortions after six weeks of pregnancy, Citigroup offered to cover the travel expenses of employees traveling out of state for abortions. One lawmaker in the state threatened to introduce legislation that would prevent the bank from underwriting municipal bonds in the state.

Here’s what to know about the bill and what it means for Disney:

What would the legislation do to Disney?

The bill would dissolve Disney’s special taxing district in June 2023. Known as the Reedy Creek Improvement District, the 40-square-mile zone allows the company to run its resort like a municipal government.

The status allows Disney to circumvent some state and county regulations when constructing, expanding, or improving its parks, and allows it to run its own emergency services in the district. It’s also exempt from many taxes and fees, which saves the company tens of millions of dollars a year.

Stripping Reedy Creek of its special status would remove the Disney resort’s autonomy and likely introduce legislative complications that the company has been able to avoid for 55 years. Disney contributed the bulk of the $153 million in tax revenue and fees collected in the district over the last fiscal year.

It’s unclear exactly how much the proposed legislation could cost the company if passed, but it would also have an impact on local taxpayers. Reedy Creek’s governance would become the responsibility of Orange County and Osceola County. This means that taxpayers could be saddled with millions of dollars in bond debt taken on by Reedy Creek in recent years. Democratic state lawmakers say the interest on those bonds equates to an additional tax burden of $580 per person for the 1.7 million residents of Orange and Osceola counties.

How has Disney responded?

Disney’s revenue growth is at stake with the possible loss of special tax district status, as the company would not only lose autonomy but its expenses would undoubtedly increase. Following a pandemic-induced dent in sales, Disney’s theme parks are enjoying a boom. As lockdown restrictions eased, attendance at the company’s parks grew throughout 2021. A hike in ticket prices sent revenue for the final quarter of last year up to $7.2 billion, compared to $3.6 billion in the same period of 2020. The increase helped the parks attendance generate a third of Disney’s $22 billion in quarterly revenue.

If the new bill is passed into law and the Reedy Creek district is dissolved, the company could apply to reestablish it. At the time of writing, Disney has not yet addressed the issue publicly.

Disney did not respond to TIME’s request for comment.

What could happen next?

Gov. DeSantis is expected to sign the bill into law in short order. It would be a big win for him as he continues to stoke culture war issues ahead of a potential 2024 presidential run.

“If Disney wants to pick a fight, they chose the wrong guy,” DeSantis wrote in a recent campaign fundraising email.