How Has The Occupancy Tax Been Spent?
Financial analysis of the County’s financial records has uncovered more than $60 Million of spending that is being questioned under our attorneys’ interpretations of the 2004 OT law.
Our analysis of the auditor reports from 2005 to 2018 and the projected year-end 2019 and the proposed 2020 budget noted that the auditor classified about a third of the spending as Promotions, in accordance with the law. About another third was classified by the auditor as Tourism Related Expenses (TRE), but the rest of the OT revenues were transferred into the County’s General Funds, apparently in violation of the law. Once the money is in the General Funds it is not transparent to the public how the money was actually spent.
Not all the OT funds were spent each year. The unspent money is reserved in a Tourism Development Authority Fund that currently has a balance in excess of $10 Million.
See the pie chart below to get a sense of the proportions of the spending.
2005 to 2020 Occupancy Tax Spending from Audit Reports and approved budgets
Below is a table from the lawsuit showing the audit report data on the amounts transferred each year.
Source: Audit Reports, Commissioner Approved County Budgets
The questioned expenditures fall into six different categories based on how they violate the law according to our attorneys.
Source: Audit Reports, Commissioner Approved Budgets
Below is a partial list of questioned TRE spending projects. We also list the projects that the auditor classified as TRE and we agree.
Note that of the more than $50M of EXTRA OT collected after Currituck County raised the OT tax rate to save Currituck’s beaches, less than $50 thousand has been spent for that purpose.
