Posted Friday, June 26, 2015 9:42 AM | Contributed by Jeff
The Walt Disney Co. is seriously considering a $1 billion-plus expansion of the Disneyland Resort with new attractions, a new parking structure with at least 5,000 spots and other improvements to the massive theme park complex. In exchange for the investment, Disney wants the city of Anaheim to forgo a tax on theme park admission tickets for another 30 years, according to a public notice published Thursday by the city.
Read more from The Orange County Register.
Ok, I don't think cities should necessarily give away the farm for business. That said, this comment right here is absurd: "Tait supported the current gate-tax ban for Disney during a previous stint on the City Council, but said Thursday he is “wiser” now. Unlike in 1996, Tait said, Anaheim currently faces an estimated $500 million unfunded pension obligation."
Listen, the unfunded pension obligation was created by you and your predecessors who allowed the obligation to grow uncontrollably. That needs to be fixed regardless of what Disney decides to do. You can't look at private business and say, "aha...we will just fix this hole by taxing THEM." No, fix your policies so that the pension obligation goes away forever.
But here's the other thing... is Disney not going to invest if they don't get the deal? I have a hard time seeing any scenario where that would be the case. I still agree though, they made that bed.
I'm totally fine with a ticket tax break, since the merch and food (I assume) are still taxed and that's where the real money is.
Pretty much everyone's "pension funds" became a problem for two reasons:
First, people now live longer than ANYONE expected when the pensions were created. You can be generous with someone who lives 5-10 years after retiring, but have to be less-so when they're going to make 20-25 years after retiring.
Second, and much less likely to be publicized, is that these funds are now SO frequently under the control of hedge-fund managers and other investment "wizards" that are not at all unlike the bank managers in South Park...."and...it's gone." The promises made to the employees must be honored, but they also must be reasonable. And they cannot afford to pay hundreds of millions in "fees" to those supposedly investing on behalf of the workers (Gov. Christie, you're up).
edit: By "reasonable" retirements, I mean they have to be able to account for business cycles, demographic changes, etc. If the retirement age is going up (and by all accounts, it will) - that helps fix the first problem...for a while. Like the minimum wage discussions we have frequently, you have to account for variations across time AND place. And no one can afford to make billions for hedge-fund guys at the expense of the workers who put YEARS of their effort into accruing those funds.Last edited by rollergator, Friday, June 26, 2015 1:09 PM
There is definitely a generational change in expectation. I can't imagine anyone looking out for my retirement other than me, quite frankly. Still, I understand that promises were made, and they certainly should be honored.
Yeah, I was wondering how much the park saves, or the city loses, to equal a billion dollar investment. But then again, 30 years is a long time. (I'll be dead before this topic comes up here again...)
I'll assume we'll see the billion dollars spent at Disneyland before I'm even in the ground. (or scattered at Cedar Point, I should say) THEN what's Disneyland gonna do for money!? :-)
(or scattered at Cedar Point, I should say)
Funny, I tell my wife I want the same thing, my ashes scattered around CP... She thinks I'm kidding. I'm not sure if I'm joking or not!
Doubtful that Disney fails to invest based on the imposition of an admissions tax. There is no way they are going to hold off on Star Wars Land regardless of what Anaheim does.
A 5% admissions tax, on top of the sales tax, amounts to almost $5 a head more. Obviously Disney realizes this $5 comes right out of their pocket. $5 spent at the gate that isn't gate revenue, is one less (soda, churro, popcorn, whatever), and of course they don't want that to happen. I can't argue their position.
Most of California is staring down the barrel of huge unfunded pension obligations. All self inflicted. It's going to be ugly.
I would be interested to see what percentage of tickets at the Disneyland resort are sold at the gate vs. purchased in advance. I don't know that $5 additional dollars is really going to curb in park spending all that much, especially for those guests who purchased their tickets in advance or as part of a package. There is too much time in between purchases.Last edited by Mulfinator, Sunday, June 28, 2015 11:42 PM
Isn't this like me asking the government to stop taking taxes out of my paycheck and in return, I will purchase groceries?
No this is more like you saying to the government that if they give you a small tax break in one area, you'll more than make up for it by increased sales tax inside your theme park. They're not asking not to be taxed at all.Last edited by Tekwardo, Monday, June 29, 2015 4:58 AM
I think I would put this in one of the more generally broken ideas about economics, that if you take away from something, or add to something else, that there's some zero-sum thing going on. The worst is example is that if you give tax breaks to companies, they'll spend more and "create jobs" outside of any change in demand. Or if I make more money, I'll spend more of it on whatever just because I can.
Wait, you mean trickle-down Reaganomics doesn't work?!
It works. Just not for poor people. Ask Disney.
Or "poor people"
Disney was going to make the investment no matter what (ahem, Harry Potter?) I wonder of the council will call their bluff.
Council Bluffs only happen in Iowa...
(Sorry, I was short one pun from last week, and needed to catch up).... ;~P
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