Taxing Free Speech
Do Not Rouse the Sleeping Bear
Why should a small business owner be required to fund advertising for his competitors? David Gersenson and the Mackinac Center for Public Policy are demanding an answer from the Sleeping Bear Dunes Visitors Bureau and Steve Arwood, president of the Michigan Strategic Fund. On February 15, they filed suit in the State of Michigan Court of Claims asking that the tax in the Community Convention or Tourism Marketing Act be declared unconstitutional and seeking nominal damages.
Gersenson is the owner of Glen Arbor’s Lakeshore Inn and the Sylvan Inn Bed and Breakfast. As a lodging establishment owner, he has to pay a 5 percent tax on every room he rents out. This tax goes to the Sleeping Bear Dunes Visitors Bureau. This may not sound too bad, until one realizes that Gersenson has no control over how the visitors bureau uses that money.
And how is his money used? It is being used to advertise for his competitors. His money is being used to fund a promotional website that mostly focuses on other lodging establishments, including the resort that houses the visitors bureau’s offices. Gersenson and the Mackinak Center believe that this Act violates Gersenson’s free speech rights by compelling him to pay for speech against his will.
The room tax diverted to the Sleeping Bear Dunes Visitors Bureau is authorized by the Community Convention or Tourism Marketing Act. The intention of this act was to “promote convention business and tourism within certain Michigan municipalities.” Under the act, a qualifying non-profit corporation is authorized to establish a convention and tourism marketing program and impose an assessment upon owners of transient facilities in the assessment district to pay for implementing the marketing.
The United States Supreme Court has ruled that a person may not be forced to subsidize speech against his or her will, regardless of the message (see Abood v. Detroit Board of Education and Keller v. State Bar of California). Consequently, one can make the case that a tax like this one is unconstitutional compelled speech. The Supreme Court has also held that governments cannot give independent organizations like the visitors bureau the power to compel business owners to subsidize commercial speech (the only exception being industries that are effectively controlled by the government through major regulation or subsidies—see USDA v United Foods, Inc).
This is not the first time that the Mackinac Center has come to the aid of lodging establishment owners in defense of their free speech rights. Last summer, the center challenged the same law in a lawsuit filed on behalf of a Michigan resort owner who was being forced by a regional visitors bureau to subsidize marketing campaigns against his will. The resort owner later sold his property, and the center had the suit dismissed.
In what world does it make sense to force someone to advertise for his competitor? Imagine Pepsi having to pay to promote Coca-Cola. No one should be required by the government to pay for advertising that he neither wants nor needs. Compelled speech is not free speech.
This is why the Center to Protect Free Speech was established—to make sure that everyone has the right to say what they want to say.