Back in July of this year, the Anaheim City Council voted 3-2 to extend for 30 years the city’s existing ban on an entertainment tax on Disney’s Anaheim theme parks. In exchange, Disney promised to invest $1.5 billion in expanding Disneyland and break ground by the end of 2017. Councilmemember Jordan Brandman, Kris Murray and Lucille Kring voted in favor of the extension; Mayor Tom Tait and Councilman James Vanderbilt voted against it.
Disney subsequently announced plans for to break ground in 2016 on a Star Wars Land addition to Disneyland.
As we also know, a coalition of left-wing interests, along with a few misguided Republicans, angrily denounced the council majority’s vote to place Disneyland Resort visitors beyond the reach of the taxman for 30 more years. Being progressives, a primary political impulse is spending other people’s money, and these interest groups and activist are peeved that a wall has been placed between themselves and the wallets of Disney visitors. Leftist academic Jose F. Moreno demagogued, incorrectly, that Disney was being given a “tax exemption” – ignoring the fact that a gate tax falls not on Disney but on individual ticket buyers.
Scott Shackford, associate editor of the libertarian magazine Reason, published a column in today’s OC Register that is a useful reminder of how wrong critics of that agreement are:
The Disneyland parks are already a huge source of tax revenue for the city. Officials for both the park and Anaheim told Reuters that Disney, which sprawls over 157 acres within the city, paid $56 million in property, sales and hotel room taxes in 2014. The taxes paid by the restaurants, shops and non-Disney hotels that surround Disneyland no doubt provide millions more to the city.
Disney has a reputation for powerfully negotiating itself all sorts of tax credits and outright subsidies. The company has snagged plum deals from redevelopment agencies in California, and it has redirected tax-exempt bond money toward its projects in Florida. But there’s an important detail that makes the city’s tax break a little bit different: Anaheim currently does not have any “gate tax.” No entertainment venue in the city is currently required to charge an additional fee or tax for entry. So Disney isn’t actually getting any sort of special deal here. If Anaheim actually does attempt to implement a gate tax, the city will have to refund any money taken from Disney’s customers back to Disney. There’s no sign that Anaheim has any intent to implement such a tax, and it would require a public vote to do so.
Anaheim Mayor Tom Tait voted against the extension of the tax exemption, arguing that the city was giving up a potential source of revenue that could help it fix other financial problems, like its $500 million in underfunded pension obligations. “This just shouldn’t happen,” Tait said when he voted no. “I think, down the road, people will rue this day. Other people will look at us and say that we gave away the people’s right to vote” for the new tax.
But the mayor’s got it backward: Anaheim citizens shouldn’t be looking for ways to punish Disney and its customers — not to mention all the other entertainment-oriented businesses in town – just so the city can create new, additional taxes aimed at shifting money to cover the government’s mismanagement of its own finances.
You can read the entire article here.
It’s useful to note it is the same coalition of political progressives and a few misguided Republicans is currently raising a ruckus over the council majority’s refusal to obey its dictates regarding council district boundaries and sequencing. Their protestations provide insight into the kinds of policies we can expect if they ultimately succeed in electing a majority of the Anaheim City Council. That ought to be food for thought for those actual and self-styled conservatives who have been assisting these progressives in achieving their political goals in Anaheim.