How Disney Bought a City Council

Plus: A Georgia senator tries for a stadium swindle.

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I’ve been seeing a lot of commercials recently trying to convince people that now is the perfect time to schedule a Disneyland vacation — even though the California park is largely closed at the moment due to coronavirus-related restrictions.

But whenever the park does re-open — perhaps not until after our super-concentrated medical system gets a vaccine distributed — Anaheim, where Disneyland is located, will likely not benefit from a proposed extra fee leveled on visitors, or any other significant help from the corporation. That’s because Disney managed to purchase itself the Anaheim city council in this month’s election.

Anaheim is a good example of a modern company town, where one corporation has leveraged economic might into political power, shaping the composition of its governing bodies, and therefore the city’s budget and its treatment of workers.

I wrote about the full backstory behind that extra fee, known as a gate tax, here. The short version is that some council members and activists in Anaheim earlier this year wanted to implement the gate tax to deal with the city’s coronavirus-related budget deficit — might as well make some extra revenue from potentially pandemic-expanding visitors who were going to come anyway! — but the Disney-backed mayor and other city council members stopped it.

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As I explained in my book, Anaheim’s history of kowtowing to the demands of Disney led to a voter backlash in 2016 that, ever so briefly, resulted in a city council that was not super-friendly to the corporation. At the time, then-Mayor Tom Tait, a Disney antagonist, said one-third of the city budget was going to support Disney and other major resorts. Overall, Disney has received about $1.2 billion in public subsidies, with about $500 million of that coming from California.

Disney couldn’t let a city council opposed to its public largesse stand, of course, so it spent $1.5 million in the 2018 elections backing a new mayor and two city council members. It followed that with another $1.5 million this year, resulting in the likely seating of three more pro-Disney candidates, giving it a council supermajority of five out of six seats. (Results haven’t been finalized yet, but haven’t substantively changed in weeks.)

Disney’s political action committee pegged candidates who don’t want to keep spending public resources on a massive corporation as “hostile to jobs.” While, of course, there were other business interests spending in these races, Disney was the largest contributor.

Denise Barnes, an incumbent who backed the gate tax and looks like she’ll be ousted, faced an absolute avalanche of special interest spending, leading her to be outspent by tens of thousands of dollars. Disney spent six times what Barnes raised for her entire campaign just on literature and phone banking for one of her opponents.

Now, Jose Moreno, who I’ve praised before and was the other member in favor of the gate tax, will be the lone voice of Disney dissent on the council. (Barnes and Moreno were also against the recent sweetheart deal Anaheim made with the Los Angeles Angels that I described in this edition.)

This is an instance in which the subsidizing of a dominant corporation not only allowed it to entrench itself economically, but also entrench itself politically. Disney pulls a similar trick in Florida, home to Disney World, not surprisingly.

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Disney spins a tale that without public support, the whole Anaheim economy will tank, and voters — understandably fearful, given the precarious economic times we live in — buy in. Political advertising and name recognition, like it or not, work. Corporations and their allies build on the big myth that the only way to grow local economies is to accede to the demands of major employers and hope for the best.

Now, Disney is in a position to not only keep the public budget dollars flowing to itself, but also wield veto power over taxes and fees, labor regulations, building codes, and whatever else the city council has responsibility for. Economic power begets political power begets more economic power.

The worst part of this is that Disneyland isn’t going anywhere. While other corporations can wield credible threats that they’ll move production elsewhere, Disney isn’t going to do that with one of its resorts. Yes, it can open new ones and move investment toward them, but it’ll never abandon California. So the fear of economic calamity it gins up is rank nonsense.

Amongst the boondoggles covered in this newsletter, amusement parks are actually not the worst: Unlike many other things officials choose to subsidize, amusement parks actually do draw new visitors into a place who wouldn’t have been there otherwise, and because they’re pretty self-contained, the negative spillover effects into communities are minimal — unless, of course, there’s a pandemic going on.

But economic data aside, these parks don’t need endless public money funneled into them once they’re there. And the people who run them shouldn’t turn that gig into one in which they effectively receive veto power over city policy, as well. But that’s exactly how it’s going down at the self-styled happiest place on Earth.

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ONE MORE THING: Propublica ran an interesting piece last week noting that Georgia Sen. David Perdue — one of the Republicans involved in Georgia’s dual run-offs that will decide which party controls the Senate — tried to personally intervene in the writing of a Treasury Department tax rule so that it explicitly aided sports team owners. The ultimately unsuccessful push would have benefited several of his donors, including the other Georgia senator facing voters in January, Kelly Loeffler, who is a co-owner of the WNBA’s Atlanta Dream. Synergy!


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Finally, if you’d like to pick up a copy of my book, The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, go here.

Thanks again!

— Pat Garofalo