Hilton Head proposes tax and fee increases to balance budget after hurricane

Hilton Head Island town manager Steve Riley proposed Tuesday that the Town Council increase taxes and fees to fund an $86 million budget for 2018 after Hurricane Matthew recovery efforts depleted reserves and will continue to be a hindrance into next year.

A series of increases to property taxes and town fees could raise more than $5.7 million, documents provided by Riley show.

“The last two years we have balanced our budget by drawing from reserves,” Riley said. “There is nothing to draw from this year. The reserves are gone.”

About $2 million came from the town’s reserve fund to balance the budget each of the previous years, Riley said.

The list of tax and fee increases that Riley proposes include:

▪  Temporary five mill increase that will last for five years. This increase would cost property owners $28 annually on a $100,000 home.

▪  Permanent 1.18 mill increase. This increase would cost property owners $4.72 annually on a $100,000 home.

▪  Fifteen percent increase to EMS fees placed on services provided

▪  Fifteen percent increase to business license fees

▪  Unknown increase to stormwater rates assessed on property taxes

The tax and fee increases would be on top of the town borrowing funds to replenish its reserves in case of emergency before the next hurricane season. Town Council approved the use of up to $20 million in loans in March.

The town started the year with about $25.8 million in reserves.

Town staff has estimated total recovery costs will be about $82.1 million. After reimbursement from the Federal Emergency Management Agency, the town will have about $26.7 million in expenses left.

It is unknown when FEMA will refund the town. It is also unknown what funding options could come from the county or state to help with recovery costs.

Riley said the proposed budget, which will start July 1, is lower than the $106 million 2017 fiscal budget. He said this is mainly because the town had several large capital projects such as beach renourishment in 2017.

The town approved the first reading of the proposed budget Tuesday. Town Council will hold a budget workshop at 3:30 p.m. May 9 at Town Hall, One Town Center Court.

This story was originally published May 2, 2017 at 8:51 PM with the headline "Hilton Head proposes tax and fee increases to balance budget after hurricane."