The “revenge” political attack on Disney by Florida’s Republican governor, Ron DeSantis, for opposing his “don’t say gay” law violates the party’s mantra of restrained government, his counterpart in Arkansas said.

DeSantis and Asa Hutchinson could be rivals for the Republican presidential nomination in 2024. On Sunday, Hutchinson laid out his position on CNN’s State of the Union.

“I don’t believe that government should be punitive against private businesses because we disagree with them,” the Arkansas governor said, referring to the law DeSantis signed last week dissolving Disney’s 55-year right to self-government through its special taxing district in Florida.

“That’s not the right approach… to me it’s the old Republican principle of having a restrained government.”

Critics have criticised DeSantis for escalating his feud with the theme park giant, his state’s largest private employer, over the “don’t say gay” law, which bans classroom discussion of sexual orientation and gender identity in certain grades.

Many educators believe the law is “hurtful and insulting” and threatens support for LBGTQ+ students in schools. Equality advocacy groups have filed a lawsuit against it.

“They are abusing their power and trying to scare Floridians and businesses away from expressing any support for that community,” a Democratic state representative, Carlos Guillermo Smith, has said.

Hutchinson appeared to have no problem with DeSantis going after the LGBTQ+ community.

“The law that was passed is to me common sense that in those grades, those lower grades, you shouldn’t be teaching sexual orientation, those matters that should not be covered at that age,” he said.

“[But] let’s do the right thing. It’s a fair debate about the special tax privileges, I understand that debate. But let’s not go after businesses and punish them because we disagree with what they say.

“I disagree with a punitive approach to businesses. Businesses make mistakes, [Disney] shouldn’t have gone there, but we should not be punishing them for their private actions.”

Disney struck back at DeSantis this week by informing investors that the state cannot dissolve its status without first paying off the company’s bond debts, reported by CNN to be about $1bn.

The dispute centers on an entity called the Reedy Creek improvement district, established by Florida lawmakers in 1967 to allow Disney to raise its own taxes and provide essential government services as it began to construct its theme park empire.

DeSantis’s law seeks to eliminate all special taxing districts created before 1968. Analysts predict families in two counties that Disney’s land covers could face property tax rises of thousands of dollars each if Reedy Creek is terminated next summer.

DeSantis insisted during a Fox News town hall on Thursday that Disney would be responsible for paying its debts. Without providing details, he promised “additional legislative action” to fix the issue, CNN said.