Hilton Head Island's government can keep its spending steady next fiscal year; thereafter, maintaining services and making new commitments will be challenging.
That assessment from town manager Steve Riley comes as the island faces declining property values in a reassessment later this year, and state law limits the town's ability to raise property taxes.
Riley presented a largely status quo budget at Tuesday's Town Council meeting. It does not include a tax increase but does include large drops in spending for debt and public improvements. It covers the fiscal year beginning July 1.
The town's millage rate, which council increased last year from 18.54, would remain at 19.33, Riley said.
The proposed $70-million budget is nearly $35 million less than the town's current consolidated budget of $105 million, which includes a stormwater utility.
Spending on general operations would dip slightly from $33.6 million budgeted this year to $33.2 million next
"It's an appropriate budget for now," Mayor Drew Laughlin said before the meeting. "We do have a lot of demand for capital improvements. And, as we go forward, we'll have to figure out how many of those we're willing to pay for and can operate."
In the past two years, the town has fielded requests from residents to build an aquatics facility, a concert hall and a $12-million expansion and renovation of the Island Recreation Center.
Tourism on the island is slowly recovering and construction and real estate activity has shown strong increases since the 2008 recession, but are still far below 2005-07 levels, Riley said.
Council will hold a series of budget workshops over the next several weeks before finalizing spending at its June 19 meeting. The next workshop is set for 3 p.m. Tuesday, May 8.
- Audit provides cautionary note about future island spending: March 3, 2012
- Hilton Head mayor: 'We're getting no help from Columbia': Jan. 11, 2012
- Hilton Head council approves budget, tax increase: June 21, 2011
- Realtors ask Hilton Head to drop tax increase proposal: June 13, 2011
- Town of Hilton Head Island salary data (2009-11)