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.
“Winner, winner! Duck dinner!” Those calculating Disney’s contribution to Anaheim’s General Fund are working without a “net.”
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.
I hate to say it, Cynthia, but Ryan’s $2.4 million guess is closer to $18.43 million than is Carl’s $40.2 million! (Although it looks like Biff’s second guess for direct contributions was most on the mark.)
I’ve only read it quickly so far, but are we to understand that this is a case where they calculated “General Fund revenues” when any honest accounting would look at NET General Fund contributions?
Zinger @ 5% I think it’s the closest . . .
Yeah, man, where’s my Disney pins?
“because Anaheim’s Finance Director claims that Anaheim does not track revenues based on special Districts or areas of the City.”
So, the residents are being asked to make a 155-acre, + “investment’ , where the GUARANTEED return is all to the folks requesting the investment, and the SPECULATIVE part, is all (?) for the rest of us, and we have NO WAY to even track either (like the commercials say) ‘Past performance OR future results’, except to pay (through the nose ?)for a 13 page pamphlet, modeled on cities that AREN’T Anaheim? Can the FD enlighten us if that is HIS decision, the City Manager’s decision, a charter requirement, lack of direction from the Council, or WHAT? And HOW FAST do they intend to REMEDY that oversight?
Do you think all those involved would be as complacent as they expect US to be, if CalPERS had the same (non)disclosure policy about THEIR future income, as they apparently do for the City’s?
And while on the subject of non-disclosure, perhaps this morning’s Yahoo News find will amuse-
http://news.yahoo.com/video/whoknew-profitable-non-profits-companies-060000045.html
the particular sentence being-
” Major League Baseball gave up its tax-exempt status in 1997 so that it didn’t have to disclose the salaries of its top executives – a requirement of non-profits.”
You guys are gonna have a heart attack once Disney announces their plans for a third park. I’m sure you guys are already against that, right?
I can’t think of anyone around who “opposes Disney” per se, as opposed to opposing certain of their practices (the fireworks; ruining copyright law so they can prevent the Boopification of Mickey.) i’d want and expect to support a third park — but it would depend on the deal for the public! Is that so shocking?
If they’re pulling their weight — great! If they aren’t — then “not great” to “actively bad,” depending on exactly what they’re doing. Appropriating public monies for private gain because they’ve bought themselves a Council majority whose loyalty to them exceed their loyalty to the city would be an example of “bad.”
No TruTeller, you missed the point.
I’m pretty sure that Cynth would not mind a third park… provided that it is accompanied by a proportional contribution to the general fund so that the city can manage the third park’s collateral expense.
You really captured the issue Cynthia. Its all about proportionality and fairness. But, OMG that parking lot deal erks me something fierce.
” But, OMG that parking lot deal erks me something fierce.”
Isn’t that the same kind of BS deal they are (or want to) making with Arte?
The whole thing smells like cat crap to me!
—–
BTW Cynthia, If you would like to amend your decision on YOUR contest, please feel free, it certainly isn’t going to hurt my feelings one bit.
Frankly I’m just happy as hell, I got as close as I did with just a quick review of the numbers and a few minutes of searching, all without using the calculator.
Not too bad considering my chemo brain problems! 😉
Daniel you are correct, I have no problem with a 3rd park, indeed I see the need for it. Disney is bursting at the seams, their continuing price increase I think has less to do with greed than it does prohibitive behavior, I suspect they are trying to keep crowds down because they cannot accommodate them. A third park is also an opportunity to provide what the current parks lack, the “big rides” that Knotts and Magic Mountain do so well. Tie in some serious thrill ride/coasters with the Marvel and Star Wars themes and grab that crowd that dismisses Disney as open for kids and old people.
That said, I do not feel any obligation to pay for improvements that increase Disney’s profit margins if my city is not going to participate in the benefits as well. So when I hear we are putting up $318 million for a streetcar that makes traffic worse, and takes the private property of other business owners to avoid inconveniencing Disney (and coincidentally benefiting yet more of Pringle’s clients in the process) I am doing what I can to scream my head off in objection, thanks anyway.
I believe in the free market, I applaud Disney for making the investment in the expansion of their highly profitable endeavors, I believe they are entitled to every nickel they can squeeze from willing customers in exchange for the risk they put out there, but there is NO reason whatsoever for the taxpayers of Anaheim to invest another penny into Disney’s profit machine beyond what we have already put in.
And that just about sums it up. We’re going to have to have that printed up as stationery.
Cynthia, I think you have the tone right too. Demonizing Disney ala Galloway is pointless. The board of directors/shareholder/officers have no idea what is going on in our small corner of the world, and the lobbyist will push for whatever they can get away with. (Literally)
If we put in place a reasonable council, the behemoth will absorb the information and change their lobbying strategy accordingly. Obviously, we would never do anything to jeopardize the bottom-line. (Assuming we ever get a chance to do anything…)
Yep, I stand corrected, and will get the pins to Mr. Cantor. Thanks for playing,
Look for more, coming up!
Zenger!
Ryan, I do not see Zenger’s estimate…what/where was it?
My apologies, it was Zenger, he posted this at the bottom of comments and I missed it. I will get the prize to him ASAP (have other stuff for him anyway, one trip.)
David Zenger
Posted October 31, 2013 at 2:41 PM
I’m going to say 5% – $12,500,000.
Aw shucks.
Give my prize to some deserving kid.
I was digging around for the original bond docs and came across a letter to the editor from back in the day, and wishing more of us might have paid attention at the time to this argument, This guy had the message completely nailed!
“Anaheim, Times Skewed on Disney
October 27, 1996
The Times suffers the same myopic perspective on the Disney expansion financing as our Anaheim City Council and city manager (Editorial, Oct. 13).
The important point obscured by the frequent chant, “Taxpayers don’t pay for these projects,” is that any collected taxes are general fund revenues, and supposed to be first prioritized for public benefit: police, fire, road repair, parks.
We in Anaheim have been enduring many general fund expense sacrifices for over 10 years while being told our city reserve funds were untouchable. Do most residents still remember the budget-balancing staff cuts and privatization furor, and the utility tax masquerading as an “access charge” that we pay in every bill, still there despite “recovery?”
The Anaheim Stadium deal left us with no revenue source for $9 million to $12 million in original stadium bonds. Demolition and construction during the Disney expansion will produce a decline in the transient occupancy tax, 6% of which supports the General Fund. If that revenue is not critical to the city, as council members and others claim in their ballot statement supporting Measure B, why has there been total silence from the city on its plans to recover from any of these shortages? The conclusion is that they have no plans, except for new fees, taxes, service cuts, or hiking the utility bill access charge.
The taxpayers’ only recourse in this situation is to veto Measure B at the polls Nov. 5 and force a renegotiated agreement that gives the residents more than crumbs. We otherwise will have 40 years to ponder the financial cement hardening around our feet.”
Hello, I enjoy reading your segments, Cynthia. I take issue with what you said about Disney and greed. They have suddenly cut my friends hours in half after working there for several years full time so that they didn’t have to pay health benefits under Affordable care Act. You know they can afford to, so why so they treat their employees this way?