Several decades have passed since I last turned in math homework. But I remember the common requirement to provide more than just the correct answer. Teachers often expected students to demonstrate our computations.
We had to show our work.
That scholastic memory came to mind as I read the North Carolina Supreme Court’s recent decision in a local tax dispute.
Currituck County residents had sued county commissioners who spent occupancy tax money on public safety, emergency services, and other items not directly related to tourism.
The state’s highest court ruled unanimously on May 22 in favor of the county. The decision reversed a state Appeals Court opinion favoring concerned taxpayers.
“[W]e conclude that Currituck County’s occupancy tax statute does not prohibit the County from spending revenues on enhanced public safety services related to area tourism,” Justice Anita Earls wrote. “The County could — and here, did –– reasonably conclude that the challenged public safety spending is tourism-related because tourists are not likely to visit Currituck if they believe it is unsafe and because substantial tourism-related population changes greatly increase the demand for public safety services in the area and at a year-round cost.”
Justice Tamara Barringer backed Earls’ opinion. Yet she wrote a separate two-page concurrence. It outlined concerns about the way Currituck officials made their decisions.
The concurring opinion should not have surprised anyone who listened to the case’s oral arguments in February. Barringer had asked why county commissioners made occupancy tax decisions without sitting formally as Currituck’s Tourism Development Authority board.
“If this board or authority actually made those expenditures, I don’t think we would be in the position we’re in now: speculating about whether there was judgment done and whether it was rational,” Barringer said. “That’s the friction point for me.”
Three months later, Barringer agreed “that Currituck County officials have the discretion to appropriate occupancy tax revenue to spend on public safety services.” She wrote separately “to express my concern at the lack of record evidence demonstrating that this discretion is actually being exercised.”
In other words, Barringer believed commissioners hadn’t shown their work.
State law gives Currituck officials “the exclusive authority to make a ‘judgment’ on whether a certain manner of spending will ‘attract tourists or business travelers to the county,’” Barringer explained. “Thus, if the Commissioners determine that appropriating occupancy tax revenue to public safety services will attract visitors, this determination will be upheld unless it is so unreasoned as to constitute an abuse of discretion.”
Plaintiffs argued that commissioners made occupancy tax decisions “without even a cursory discussion of whether the appropriation was tourism-related,” Barringer continued. “Instead, plaintiffs claim that the occupancy tax revenue was routinely dumped directly into the county’s general fund, rendering those funds practically untraceable.”
“Disturbingly, defendants did not even attempt to refute this accusation,” Barringer wrote. “This lack of transparency in government is extremely troubling.”
“Although the Commissioners have the power to exercise judgment as to whether an appropriation is tourism-related, they are required to actually exercise this judgment,” Barringer added, citing the 1985 precedent case State v. Ashe. “Best practice would be for the Commissioners to appropriate the occupancy tax revenue to identifiable, discrete projects only after making clear findings that they believed those projects were tourism-related.”
“To do any less is to invite legal challenges from a citizenry rightfully dismayed by its government operating in the shadows,” she explained.
“Transparency in government is critical,” Barringer wrote. “Democratic institutions are undermined ‘when the transactions of … rulers may be concealed.’ It is ‘a fair presumption that secrecy means impropriety.’”
“I share in plaintiffs’ exasperation at the lack of transparency exhibited here. Citizens and taxpayers deserve better,” Barringer concluded.
The concurrence cited the state Supreme Court’s 2024 decision in Philip Morris USA v. NC Department of Revenue. In that case, Barringer wrote for a 5-2 majority that favored the tobacco company in a dispute with state tax collectors.
Barringer scolded Revenue officials for failing to disclose their changing interpretation of state law.
“Simply put, the Department’s actions amount to an abrupt reversal of policy without notice to the public or taxpayers,” she wrote in 2024. “The actions here lacked transparency and are plainly contrary to the trust the public deserves from its government. This conduct is unacceptable.”
“[C]itizen taxpayers must be able to rely on the representations of the Department,” Barringer explained. “Businesses need consistency and clarity to operate efficiently.”
In both cases, one of the state’s top jurists criticized government for failing to operate transparently. In math homework terms, they didn’t show their work.
Mitch Kokai is senior political analyst for the John Locke Foundation.
