The Landings on Indian River | Mackinac Center Staff

The Michigan Senate may soon debate Senate Bills 703 through 707, which were introduced late last year. These bills would amend current law to increase government oversight of tourism agencies, having the practical effect of ensuring that government speech trumps individual free speech for lodging owners.

State law allows local tourism agencies to impose an assessment (tax) on rooms to fund their activities. One result is that lodging owners may get swept up into a bureau’s tourism advertising efforts against their will. Indeed, such advertising may actually disadvantage small operators when compared to their larger and more influential rivals. The ideal legislation would repeal the ability of local tourism bureaus to impose such assessments rather than increase state oversight.

Instead, the bills impose more government control over the bureaus. That, in turn, will turn the activities funded by the assessments into "government speech," making the assessments immune from free speech challenges. You can't sue if your tax dollars pay for a government official whose policies you don't like, meaning you will be forced to pay for speech you don't want. And if the bills are enacted into law, the Mackinac Center Legal Foundation won't be able to sue to protect the hotel owners' speech, because the assessment will be treated more like a tax, paying for a public official to do his official job.

We have twice litigated for the liberty of lodge-owning clients in northern Michigan on free speech grounds. Commercial speech cannot be compelled. Both cases basically ended in our clients’ favor, though without a formal court decision. One lodge owner sold his business and retired before extricating himself formally, while the other was released from the assessments of the local tourism bureau, with its consent.

It must be emphasized here that the Mackinac Center is not opposed to these bills because they would thwart our ability to sue, but rather because they would suppress the free speech rights of lodging owners who want no part of the local tourism agencies’ advertising efforts. In an age of social media, many business owners are quite comfortable doing their own highly nuanced marketing. These bills, in contrast, would lead to more state government control over local business operations. Furthermore, it would impose a tax on lodging, the costs of which will surely get passed on to tourists and may actually hurt tourism.

We argue that these local tourism bureaus act as part of a ‘good old boys’ network. The large regional lodging players basically control the assessment revenue and the advertising it funds. We are not convinced that these agencies are effective at all, let alone when compared to the efforts made by individual lodging owners.

These business owners should be able to decide how best to operate their lodging. No one should force them to hire a marketing firm against their wishes. But the bills would render the assessments imposed by local tourism agencies immune to many legal challenges. A better alternative is to repeal the state law that permits these unnecessary local tourism assessments and let local lodging owners handle their own advertising.

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