Hilton Head property and business owners could see big tax hikes next year. Here's why

Property tax rates, as well as business license and ambulance fees, would increase under next year’s proposed budget for the town of Hilton Head Island.

At a special meeting of Town Council on Tuesday to discuss the fiscal year 2018 municipal budget, council members unanimously approved all items on the agenda with little discussion. Final approval of the budget must happen before the start of the new fiscal year on July 1. Mayor David Bennett said he expects the budget to receive final approval at next Tuesday’s regular council meeting.

Some homeowners could see a sizable jump in their tax bills under the proposed budget. For example, annual property taxes on a year-round home valued at $350,000 would jump by almost 28 percent, which includes a 5-mill increase for hurricane recovery, town documents show. That millage would be phased out after five years.

Business license and ambulance fees would increase by 15 percent next fiscal year, according to town documents.

The total proposed town budget for fiscal 2018 is $86.2 million compared to this year’s $106.4 million. The proposed budget includes increases in the general and debt service funds, and a decrease in the capital improvement fund.

The capital improvement fund was bigger this year because of funding for projects including the planned University of South Carolina Beaufort’s island campus and improvements to the Coligny area, said Scott Liggett, the town’s director of public projects and facilities and chief engineer.

Below are items approved upon first reading by the Town Council on Tuesday.

Property tax increase:

The millage rate for the town’s general fund is proposed to increase by 1.18 mills, along with a new five-year, 5-mill rate to replenish the hurricane recovery fund.

For a home valued at $350,000 — the value that the Town Council uses — this would mean a tax increase next fiscal year of $86.52, or 27.9 percent, for a permanent resident.

Business License Fee Increase:

License fees for businesses would increase 15 percent. In examples given by the town, a resort earning $20 million in annual gross income would pay $2,205 more next fiscal year. A restaurant serving alcohol and earning an annual gross income of $2 million would pay $453 more, while a restaurant not serving alcohol and earning $1.6 million in gross income yearly would pay an additional $149.

“It’s been more than 20 years since it’s gone up,” John Troyer, the town’s director of finance, said. “Even with the increase, we’re still well below our coastal neighbors.”

Ambulance Fee Increase:

The baseline cost of an ambulance ride and the cost per mile driven would also increase under the proposed budget.

The cost of basic life support and a non-emergency ride would increase 15 percent to a base $460, along with a $7.50-per-mile charge, which would be a $1 increase, town documents show.

The cost for the most advanced level of care, which includes emergency transport and more serious problems such as cardiac arrest or trauma, would increase a little more than 15 percent to $1,010, plus the $7.50-per-mile charge.

Troyer said even with these adjustments, the town is on the “low end” when it comes to ambulance pricing.

Sewer system expansion repayment:

A cost-reimbursement agreement between the town and the Hilton Head Public Service District was approved on first reading. Final approval would repay $5.6 million to cover the cost of a sewer expansion project.

Bonds to fund projects:

Several bonds are included in the proposed budget.

• A $28.5 million bond would pay for, among other things, a recreation center building upfit, rec center pool dome replacement, sewer service projects and storm-related projects not covered by the Federal Emergency Management Agency.
• A $32 million bond would fund projects at the planned USCB campus, a new park for the Coligny area and roadways that connect the two. The Coligny park is planned for the gravel lot and surrounding land next to the free Coligny Beach parking lot.
• A $36 million bond would preserve beaches. Included in this amount is $25.2 million that the council approved last year, but which was not used because of Hurricane Matthew.
• An $18 million bond would replenish hurricane reserves used after Hurricane Matthew.

This story was originally published June 13, 2017 at 5:26 PM with the headline "Hilton Head property and business owners could see big tax hikes next year. Here's why."