Businesses can and should do their own advertising. They shouldn’t be taxed or assessed to pay for advertising they don’t want and don’t need, especially when they can do it on their own more effectively. This is what motivated George Galbraith to seek the help of the Mackinac Center Legal Foundation in his fight against an unconstitutional assessment.
George Galbraith owns The Landings on Indian River, a fishing resort situated on the banks of the Indian River between Mullet Lake and Burt Lake. For many years he has been forced to pay a special tax to fund a local tourism bureau. But last year, this assessment was increased to the maximum amount allowed by law — 5 percent. This assessment goes into the coffers of the Indian River Area Tourist Bureau, even though Galbraith doesn’t want or need its help in advertising.
The Community Convention or Tourism Marketing Act authorized the creation of the Indian River Area Tourist Bureau and other regional entities across the state to promote tourism, funding themselves through room assessments. Because using the power of government to force speech violates the right to free speech, the Mackinac Center Legal Foundation filed a lawsuit in June to defend Galbraith’s First Amendment rights and his freedom to run his business and its advertising as he sees fit.
The Landings is one of seven businesses forced to pay the room tax, and Galbraith was one of two proprietors to vote in 2015 against imposing the tax. Voting is apportioned by the number of rooms a facility rents, and Galbraith’s vote was swamped by the larger facilities, which wanted this assessment. Pointing to The Landings’ decades-long success, Galbraith said he doesn’t need the Tourist Bureau to bring people to his 17-cottage resort, especially since the Bureau's primary outreach method is an antiquated website.
Galbraith says that in the era of social media, he can promote his business more effectively on his own.
Statewide, similar entities violate free speech by imposing assessments on lodging in their respective regions. But government-run tourism promotions such as “Pure Michigan,” which are funded through the legislative appropriations process, would not be affected by a ruling in favor of Galbraith and The Landings.
In 2001, the U.S. Supreme Court ruled against a scheme that involved forcing companies to pay for advertising. In USDA v. United Foods, the Supreme Court said it is unconstitutional to force a person to pay for speech he or she doesn’t support or want. The court said this is true where the contested speech is attributed to that person in the form of marketing or advertising. By forcing Galbraith to subsidize speech he disagrees with, the Bureau is violating his First Amendment right to speak freely.
The Mackinac Center Legal Foundation is asking the State of Michigan Court of Claims to declare the tax unconstitutional and award nominal damages.
