Disney’s Private Provision of Public Goods

By David Boaz.

"Quite aside from the politics of DeSantis vs. Disney, I learned some interesting things in this article about Disney’s “special taxing district” and about the private provision of public goods on Disney’s vast Florida property. First off, the Reedy Creek Improvement District (RCID) is not a tax break for Disney:

Disney pays property taxes to Orange and Osceola County at the same millage rate as all other county taxpayers (totaling nearly $300 million from 2015 to 2020). The Florida Constitution does not allow taxpayers within a county to be treated differently unless those taxpayers consent to the creation of a special taxing district to levy additional taxes on top of the regular county property taxes.

And that’s exactly what RCID has been doing for over 50 years. Disney pays additional taxes to RCID (at the highest millage rate in the state) to cover expenditures for government‐​type functions like building permitting, fire and emergency medical services, a power plant, water and waste treatment, trash and recycling, and construction and maintenance of roadways and waterways.

And what kind of service quality does this rapacious private company provide over its 25,000 acres (39 square miles)?

The annual budget for fiscal year 2022 is more than $160 million, and RCID uses those funds to maintain a higher standard for these various functions than any local, state, or federal government entity would be able to accomplish.

As one example, the House of Mouse has immaculately maintained roadways throughout their property; Orlando locals joke about trying to get Disney to seize control over the seemingly unending construction on I‑4. The “EPCOT Codes,” Disney’s proprietary building codes, are extremely detailed and state‐​of‐​the‐​art, offering the highest level of hurricane protection and other safety measures. Three contractors who have done work at Disney whom I’ve interviewed for research on RCID (independently; they don’t know each other) called the EPCOT Codes “a pain in the a**,” but all acknowledged these demanding standards achieved a top level of safety, aesthetics, and improved guest experiences.

And the environmental issues cannot be ignored. Disney’s property stretches across a wide swath of Central Florida and is mostly green space, overlapping with the Florida Wildlife Corridor, a critically important habitat. RCID devotes millions of dollars every year to water quality alone, from the fertilizers they select to the higher water purification levels they maintain, benefitting other downstream waterways in the southern part of the state.

It’s often assumed that only government can supply such public goods, though there are many historical examples of private provision, many of them collected in this volume edited by Tyler Cowen. Now we are reminded of another example, which economist David Levy examined in 1975.

More on the topic from Fred Foldvary and Roy Cordato and Don Boudreaux. I wrote about proprietary communities and public goods in the Washington Post and in The Libertarian Mind (pp. 343–45)."