Business News for April 22, 2022

Gov. Ron DeSantis on Friday revoked Disney’s special tax and self-governing privileges in Florida, culminating…

Business News for April 22, 2022

Gov. Ron DeSantis on Friday revoked Disney’s special tax and self-governing privileges in Florida, culminating an extraordinary clash between one of the Republican Party’s leading figures and a powerful company with deep historical ties to his state.

The move, which reverses a 55-year arrangement effectively allowing the company to self-govern its theme park complex, came after a weekslong battle with Disney that became a symbol of the country’s broader cultural fights over education, sexuality and identity.

The Florida standoff largely centered on an education law recently signed by Mr. DeSantis. That law, called the “Parental Rights in Education” measure — or, by its critics, the “Don’t Say Gay” bill — prohibits classroom instruction about sexual orientation and gender identity in some elementary school grades. After internal demands to speak out, Disney, Florida’s largest private employer, had criticized the measure and paused political donations.

“I’m just not comfortable having that type of agenda get special treatment in my state,” Mr. DeSantis said on Friday, denouncing how Disney had responded to the legislation, as well as leaked videos circulated in conservative media that showed officials at the company discussing matters of sexuality and identity as part of a broader conversation series.

A representative for Disney declined to comment.

Widely seen as retaliation, Mr. DeSantis’s move illustrated just how drastically the G.O.P. has transformed from the days when its leaders often moved in lock step with the nation’s largest businesses. The episode also showed how major companies have felt rising pressure to take a stand on heated political issues.

Over the last decade or so, and especially after former President Donald J. Trump’s ascent, leading Republicans have increasingly seen political benefit in criticizing corporate America.

“Republicans who for a long time have had a close and warm relationship with U.S. corporations have started to be more selective about those relationships,” said Carlos Curbelo, a Republican who is a former Florida congressman, adding that the party’s lawmakers were not “afraid to confront even some popular brands that before would have been unthinkable.

“Whereas before it would have been unimaginable that a politician, especially a Florida politician, would confront Mickey Mouse,” he said, “now there’s actually significant political incentive to do so.”

Mr. DeSantis, a possible 2024 presidential contender who is also running for re-election this year, has been at the forefront of national battles over curriculums, classrooms and sports teams, issues that have galvanized many conservative voters.

Democrats and advocacy groups have been sharply critical of conservative efforts around those issues, and a handful of Republican lawmakers around the country have questioned whether the flurry of related legislative activity is aimed at real-world problems.

L.G.B.T.Q. leaders and some education officials have forcefully criticized the education law that set off the dispute in Florida, saying it is already having a chilling effect on teachers and may do the same for young students who have relied on schools as a safe place to talk about personal issues.

“Governor DeSantis is wielding the power of the state to punish businesses simply for not falling in line with his brutal and discriminatory attacks,” said Joni Madison, the interim president of the Human Rights Campaign, an L.G.B.T.Q. advocacy group. “Every step of this entire ordeal in Florida has been nothing more than a shameful attempt to out-Trump Trump through fear, hate and lies.”

But for Republican politicians, the decision to take on a major company over the issue is less likely to backfire with today’s conservative base than in an earlier era when business-minded moderates had far more influence in the party.

“This is, in my view, a low-risk engagement here against a company that is perceived by many Republican base voters to be aggressively pursuing or promoting a policy agenda,” Mr. Curbelo said.

That shift, evident with the rise of the Tea Party during the Obama administration, intensified amid the political realignment of the Trump era, as Republicans increasingly became the party of white working-class voters while some big-business and tech leaders — and many of their employees — moved left.

Although Florida Republicans say that the move against Disney was made to eliminate corporate perks, critics argue that the legislature only acted after the company announced it would no longer make political contributions. The company is a major contributor to Floridian candidates from both political parties.

“How is this not blackmail?” said Scott Randolph, the Orange County tax collector. “Why would a business want to invest in Florida when the entire rules can change in 72 hours? To me this sends a scary message about the business environment in Florida.”

Randy Fine, the Republican legislator who sponsored the bill to end Disney’s special self-governing privileges, said that under the arrangement, the company had the right to seize private property, build a nuclear power plant and ignore zoning rules and safety codes. The real issue for Disney, he said, was about “control — this isn’t really about money.”

As it became increasingly clear this week that the measure would be enacted, some Floridians expressed growing concerns around the tax implications, though it is not yet certain what those may ultimately be.

While the new law ostensibly takes away big perks for Disney, like issuing its own building permits, Democrats warn that it leaves Central Florida’s Orange and Osceola counties holding the bag for some $163 million in annual taxes. Others, including Mr. Randolph, warned that local property owners could see significant property tax hikes.

Disney had been paying taxes to itself, using the money to pay for things like the police and fire services. Now, Orange County says it will have to take on the costs for municipal services to theme parks that Disney had paid for through Reedy Creek, the special taxing district the legislature eliminated.

“It’s obvious that it is political retribution that is at play here,” Jerry Demings, the mayor of Orange County, told reporters. “We are trying to understand what the legislature is trying to do in this case, but I believe they have not adequately contemplated the ramifications of what they have proposed at this point.”

Mr. DeSantis, for his part, insisted that Disney would “pay more taxes” and declared that “we have everything thought out.”

Also on Friday, Mr. DeSantis signed off on the state’s new congressional map, which moves to give Republicans a significant advantage.

At the bill signing, where Mr. DeSantis approved several other measures including the so-called “Stop W.O.K.E. Act,” which restricts how race is discussed in schools and businesses, the governor blasted not only Disney but also Google and Coca-Cola for what he cast as diversity measures that were overly ideological.

At the mention of Disney, the Florida crowd booed.

Patricia Mazzei contributed reporting.