Just down the street from the Happiest Place on Earth was another place that had happiness mixed in with aggression. That place was Anaheim’s City Hall, where Anaheim’s leaders made a decision that will now affect both residents and its biggest resident off Harbor Boulevard.
After 7+ hours in session, the Anaheim City Council approved the controversial entertainment tax breaks regarding Disneyland Resort’s ticketed admission. Over the next 30 years, the City of Anaheim has agreed to not tax any admission ticket sold to guests visiting either Disneyland and/or Disney California Adventure Park. In return, Disney has agreed to invest $1 billion into creating new experiences for the Resort over the period of 9 years.
The new policy will be gaining a lot of attention over the next few days, so we wanted to break down the facts for you, offer the perspectives of both sides, and ultimately share how it affects you.
- Anaheim City Council voted 3-2 to approve the new entertainment tax policy.
- The “no-gate tax” policy prevents Anaheim from taxing any tickets to the Disneyland Resort theme parks.
- In exchange for the tax breaks, Disneyland has agreed to invest $1 billion into building new experiences inside and outside its theme parks.
- Disney says that money will be used to build things like a 5,000+ place parking structure and “significant expansion” of the theme parks (hinting at Lucasfilm and Marvel experiences).
- The new policy renews the current agreement that Disney and Anaheim had adopted in 1996 allowing Disney to invest into building Disney California Adventure Park, Downtown Disney, and the surrounding resort area.
- The current policy ends on June 30, 2016; the new policy voted on today will go into effect on July 1, 2016.
- The new tax breaks will remain in effect for the next 30 years; possibly 45 years total with an additional $500 million investment by Disney.
- Disney has affirmed that their $1 B in investment monies will be spent by 2024.
“Anaheim would not be where it is today without Disney…We are proud to support a company that continually invests back into its roots to create more economic opportunity for all that live and do business here.” – Lucy Dunn, President of Orange County Business Council
“We see that when Disney invests into something like Cars Land, the dollars and community benefits come. People would beg to have this type of money pumped into their tourism products, which ultimately helps our community.” – Jay Burress, President and CEO of Visit Anaheim
Commenting on the external benefits of not taxing admission tickets – “A $1 billion expansion would drive tens of millions of incremental dollars to the city each year, which the council could reinvest into public safety, parks, neighborhoods, pension liabilities, or whatever priorities it has for the city.” – Michael Colglazier, President of the Disneyland Resort
“I work [at Disneyland] and live in Anaheim and Disney is making it more expensive to live here [with tourism pricing for everyday items]. Taxes would lessen that. Disney is an equal resident of this city. They need to pay like us.” – Anaheim resident
Commenting on his firm stance of corporate subsidies and tax breaks – “As mayor, going against Disney is no fun. I’m always going to do what I think is in the best interest of the people of Anaheim. Sometimes that’s also in the best interest of Disney, but this is not one of those times. I couldn’t sleep if I voted for this.” – Tom Tait, Mayor of the City of Anaheim
“Every dollar [Disney] can save from a tax is a dollar they can charge. It’s not like they’re going to keep the price the same [without the tax].” – Scott J. Smith, Assistant Professor of hospitality at University of South Carolina.
How it affects you
The passing of the policy means that ticket and pass prices will not be subject to a price increase due to a tax. This does not mean that Disney has lost the ability to raise the prices of their tickets and passes at their discretion.
Consequently, we hope to see lots of future development with the $1 B investment now committed to by Disney to improve its presence in Anaheim. This means that we may be seeing a Star Wars/Marvel themed land or extra parking to relieve the overcrowding in the near future.
If there were a winner in this policy battle, it would have to be both Anaheim and Disney. With Disney’s continued investment in Anaheim’s Disney Parks, it’s more than likely that most people will want to come experience those new things (both local and abroad). This forecasted attendance boost might then lead to increased spending on things that already have tax applied to them (hotel stays, dining options, etc.).