Powered by Max Banner Ads
We have a winner in the “how much does Disney really put into Anaheim’s General Fund?” contest! Hint: the winner is NOT the City of Anaheim.
$241,569,289 local taxes generated citywide from TOT, sales and property taxes, based on the FY 2013/14 City budget documents released by the City Manager.
Readers’ guesses on how much of that number came from Disney properties AFTER debt service of bonds were;
Greg Diamond $10.00
Ryan Cantor $2.4 million or 1%
Carl Overmyer $40.2 million
Biff $50,615 if using formula of profitability of other enterprise businesses Anaheim “operates” and then Biff guessed $19.57 billion in direct and $45.63 billion in indirect contributions if calculated by the “experts” inflating the numbers for their own purposes as appears is being done on the Stadium.
Nipsey says Disney costs us negative $1million per year
And Big Box of Red Whine has given us a ton of info but I cannot discern an actual number in there that he/she believes is the result of Disney’s direct benefit to the General Fund.
Our winner appears to be Carl Overmyer at $40.2 million. Just a note, Carl was closest, but Biff’s calculations are a better fit for how we get the numbers we get.
Now for the real numbers.
In Fiscal year 2013/14 for Anaheim’s City budget, Disney properties including sales, property and TOT taxes are expected to produce $46,858,311. That is pretty close to Carl’s estimate. Now take out the Bond payments…we are only left with
$18,403,762 of Disney revenues go into the General Fund! Less than HALF of all tax revenues generated by Disney properties are available for General Fund expenses to benefit the rest of us who put up with Disney’s traffic, additional smog, and fireworks. This is the “dividend” on our “investment”…this is Kris Murray’s idea of economic health.
$28,454,351 in taxes generated by Disney properties by Disney sales tax, property tax, and TOT, gets diverted to Bond payments. How did this happen?
Between 1995 and 1997, when the ticky tacky collection of motels and strip malls was magically transformed into the “Anaheim Resort Area”, with utilities undergrounded, signage reworked (for the record I liked the Googie kitsch themes) and of course we cannot forget the expansion of the Convention Center, and the parking garage that Disney now collects $16 per car to use. (We don’t get a cut of that either.)
All of that was paid for with public bonds, $500 million worth, which are repaid through Resort revenues. Of the 15% TOT collected on hotel stays, which citywide amounts to $105,894,452 this budget year, 20% of the TOT from Resort area lodgings gets diverted to Bond repayment. That seems fair….BUT….
That is for properties NOT owned by Disney. Once on the Disney lots, ONE HUNDRED PERCENT of taxes from sales tax, property tax, and TOT, above a baseline set in 1995, get diverted back out of the General Fund, into that bond payment. ONE HUNDRED PERCENT of what was added to Anaheim’s 1995 era “economic engine” thanks to Disney expansion never sees the light of day for Anaheim residents.
Of the $46,858,311 generated by Disney taxes, $28,454,351 goes back out again.
At the time, City leaders promoted the tax base just as we hear today when the Gardenwalk and Stadium deals are being today. Catch phrases like “no impact to the CURRENT General Fund” are used, and tax rates are set at whatever is being collected today, with the idea that we are still getting what we have been getting, and we would not have seen the increase if the improvements were not funded. The end result is that despite the addition of Downtown Disney, California Adventure, and Grand Californian hotel and its Vacation Club wing, despite the impacts of additional traffic, smog, and nightly fireworks shows, Anaheim’s civic coffers are no better off in relation to Disney income than we were under Bill Clinton! 20 years after that deal was made, when nearly $20 million a year seemed like a lot of money, watching that amount and half again bleed out of our General Fund is downright painful. Is this what our children will experience in 20 years when Stadium profits and revenues from the surrounding City owned properties bypass the General Fund? Or when the Gardenwalk Hotel puts TOT into the General Fund, and the Finance Director cuts a check to Bill O’Connell in whatever retirement community he has chosen by then?
In no way can we dismiss the importance of Disney or the surrounding Resort businesses. Likely none of the TOT would exist if not for our long standing friendship with Walt and his people. So we can pull the additional Resort revenues into the equation if we want to be truly fair, and assume that very few visitors are likely to stay at the Candy Cane Inn if not visiting Disney. But it is also important to see clearly what the numbers really are, and that when it comes to the Disney property as a whole, and the net we benefit from their increased profits, the people of Anaheim are not seeing commensurate results.
Now we have a context for considering the other subsidies being demanded by the same company contributing the same amounts since 1995. How much is that streetcar going to cost us? Kris Murray’s arguments that we must help Disney grow so that we grow doesn’t make much sense when we do not in fact grow with them. Unless, of course, you bought Disney stock.
I would love to see someone smarter than me get into the weeds of the City budget and figure out how much the subsidy demands peel away from the revenues that DO come in from the Resort. We are unlikely to ever know because Anaheim’s Finance Director claims that Anaheim does not track revenues based on special Districts or areas of the City. That formula stands against any standards someone with a business-oriented mind would support. How can you NOT know what areas of the city generate the most revenues? And if so, then how do Resort forces claim that 5% of the City generates 50% of General Fund revenues?
The staff report for the Gardenwalk states clearly that once we take out expenses the number is closer to 20%. Tell me, does it feel like Disney has 20% of the influence at City Hall? Or does it feel like they have a much bigger voice than what their revenues justify?
Up for discussion. And Carl Overmyer, let me know where to send your Haunted House collectors’ pins by emailing me at Cynthia@Ward-Associates.net
Thanks for playing.