The Dilemma Of Prosperous Red States

Florida Governor Ron DeSantis last week signed the legislation liberals deride as the “Don’t Say Gay” bill. Informed readers will know the bill simply bans sex indoctrination to kids in kindergarten through third grade. But the facts won’t get in the way of hysteria and the Left has convinced Disney, one of the largest employers in Florida, to fight the law.

“Our goal as a company is for this law to be repealed by the legislature or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that,” the Walt Disney Company declared in a statement. This decision was largely driven by pressure from activists and the company’s employees. Disney has already donated $5 million to the Human Rights Campaign to fight against the law and plans to donate more to similar organizations. 

DeSantis doesn’t seem to mind this resistance. “If the people who held up degenerates like Harvey Weinstein as exemplars and as heroes, if those are the types of people and all that, that are opposing us on parents’ rights, I wear that like a badge of honor,” he said at a press conference. 

The Florida Republican’s dismissal of Disney’s complaints is exactly the right thing to do. Too often Republican governors are swayed by powerful interests to vote against bills their voters want. Last year, South Dakota Governor Kristi Noem vetoed a ban on transgender athletes in girls’ sports because the NCAA objected to it. In 2015, then-Indiana Governor Mike Pence neutered a religious freedom bill after several corporations protested. 

DeSantis shows a new model to follow, one also demonstrated by Texas Governor Greg Abbott and Republican legislators in Georgia. Corporations were not happy with the Lone Star State’s new abortion restrictions, but Abbott still signed them into law and strongly defended them. Corporations threatened Georgia over its election reforms and the MLB withdrew its All-Star Game from the state over the sensible measure. Georgia stood by its reform in the face of the backlash.

These shows of strength are all well and good, but they do invite the question of how much these states can withstand the pressure. Many red states boast of their business-friendly policies that draw companies from all over the country. Florida and Texas have received a major influx of refugees from blue states in the wake of restrictive COVID policies in left-leaning places. These states are particularly generous to large employers.

Case in point: Florida and Disney.

Just last year, the state handed the entertainment giant 20 years of tax credits worth an estimated $578 million. The purpose was to persuade Disney to move at least 2,000 of its employees from California to Florida. It’s likely many of those employees are the ones demanding that Disney punish Florida for its anti-groomer bill. 

Texas and Georgia also face similar challenges. Abbott’s policies and appealing subsidies drew a significant number of tech workers to Texas. Very few of them, however, will reward Abbott for his generosity. Beto O’Rourke, Abbot’s Democratic opponent in the upcoming gubernatorial race, boasts a massive advantage over the Republican in donations from tech workers.  

Georgia offered generous tax credits to Hollywood productions and airline companies to come to its state. That magnanimous hand did not dissuade these industries from attacking Georgia for its election reforms. Some Hollywood big shots threatened to boycott the state and activist groups pressured studios to pull productions. But the tax credits made these companies stay put. Georgia lawmakers considered eliminating these tax credits in response to the backlash. In the case of the subsidies for Delta Airlines, the Georgia House did vote to strip the company of its state benefits over opposition to election reforms. That move, however, didn’t become law. Threats were made against Hollywood, but there was no follow up.

That’s because both sides realized the current arrangement is too sweet. Hollywood didn’t want to lose the tax credits and Georgia didn’t want to lose the jobs. 

The same situation occurred in Florida with Disney. Disney would lose a lot of money if it decided to boycott Florida. It would be hard to move Disney World to a blue state. Fewer people would go there if the theme park were in, say, Illinois. Florida doesn’t want to punish Disney because it may risk losing those jobs. The credits brought thousands of jobs to the Sunshine State; DeSantis doesn’t want to lose them. The Florida governor has implied he may try to get rid of Disney World’s special self-governing status, but it remains to be seen if he will carry out that threat.

The pro-business policies of red states amount to a double-edged sword. It means prosperity and opportunities for that state. But it also comes with the threat of fifth-column corporations who feel empowered to tell Republicans how to run the state once they get there. These liberal executives want to impose their rotten values on Florida, Georgia, and Texas. With the jobs and tax income they bring, these execs get to ensure their voices are heard.

The right thing to do is to do what Republicans in the three mentioned states did: ignore them. That is certainly progress over what Republicans have done in the past when corporate power complained. But Republicans who tout their business-friendly environment need to realize it comes at a cost. The corporations may radically alter their new home states if lawmakers capitulate on their values. 

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