5 takeaways from Hilton Head’s proposed $119M budget. How your taxes are spent
The town of Hilton Head Island plans to lower its property tax rate while also increasing its budget for capital projects by about 63% year-over-year.
That’s according to the town’s roughly $119.5 million budget proposal for fiscal year 2023, which begins July 1. Town Manager Marc Orlando unveiled the budget proposal at a recent Town Council meeting.
Here are five things to know about the budget and how it would affect you if passed on June 7.
1. Your tax rate would go down. Really
The town has proposed a tax rate of 23.1 mills, which is 5 mills less than the 28.1 mills in the fiscal year 2022 budget.
This is not unexpected.
Island residents have been paying 5 extra mills — a mill is equal to $1 of tax for each $1,000 of assessment — since Hurricane Matthew in 2016.
The current fiscal year is the last year of that extra tax, which has been used for disaster recovery efforts.
John Troyer, the town’s finance director, in a phone call Thursday said the lower tax rate in fiscal year 2023 means residents will pay less in property taxes.
How much less?
Under the proposed budget, for a home valued at $500,000 and assessed at 4% (a full-time resident), the town expects a $100 reduction in property taxes in fiscal year 2023, Troyer said.
2. Money for capital projects would increase
The proposed 2023 budget is about 23% larger than the town’s original 2022 budget, which was $96.8 million.
That increase can mostly be traced back to the capital projects fund.
The fund in fiscal year 2023 would see a roughly 63% year-over-year increase to $45.6 million, growing by about $17.6 million.
How is that possible without a tax increase?
Troyer said $22 million for capital projects would be carried over from fiscal year 2022 into fiscal year 2023. (That’s money for unfinished capital projects that the town previously committed itself to.)
“It makes the new year look bigger, when we’re carrying forward those projects,” Troyer said. “There’s $22 million in carry forward, but then there’s $23 million in new projects.
“With the economy the way that it is, contractors and surveyors and everyone involved in the construction business (have) plenty of work, and so everything takes longer than what you would expect.”
The capital projects fund is for parks, roads and other public infrastructure. It’s made up of different fees, including beach preservation fees and stormwater utility fees, among other funding sources.
“This budget,” Troyer said, “is an acknowledgment of a shift, in that we’ve been for two years really closely monitoring COVID, and being cautious and hesitant about taking steps forward, and this budget is more of an ‘OK, our local economy is doing well and we need to invest in the island.’”
3. Millions would be used for the mid-island tract
The 2023 budget would allocate roughly $5.2 million to a major park project in the mid-island tract.
Design work, permitting and some construction on the project is slated for the upcoming fiscal year, budget documents show.
The 103-acre mid-island tract is the former Planter’s Row Golf Course. The town bought the property for $5 million in 2013 and awarded a $494,000 contract to a land planning consultant, MKSK, to work on the planned park and other redevelopment issues in the area.
“I think this is a once-in-a-lifetime opportunity for the island to build a very, very special world-class park,” Brian Kinzelman, a principal at MKSK, said earlier this year.
Ward 3 Town Council member David Ames, meanwhile, urged his colleagues in February to consider using a portion of the mid-island tract for a workforce housing project, but opinion was split over his idea.
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4. There’s $955,000 for a proposed housing project
The town wants to budget $955,000 for a proposed public-private affordable housing partnership on Hilton Head’s north end, Troyer confirmed.
The Town Council in February gave staff members the OK to pursue the partnership. More than 12 acres of town-owned land located off U.S. 278 near the north-end Post Office would be used for the project.
Ward 5 Town Council member Tom Lennox called the move a “watershed” moment for Hilton Head.
“No longer are we talking about developing the island or restricting and prohibiting the development of the island. We’re talking about redeveloping the island,” Lennox said.
Details about the partnership — and what will be built — have not been finalized. The council earlier this year simply gave town manager Orlando the go-ahead to issue a request for qualifications, or RFQ, to gauge workforce housing developers’ interest in the property.
5. You can weigh in on the budget proposal
The Town Council will hold a budget workshop at 9 a.m. Tuesday in Town Hall. Residents can offer feedback then.
The council voted 7-0 to approve the budget on first reading this week, but that means elected officials still need to pass the proposal once more before it becomes local law.
The second reading is scheduled for June 7.
Oh, and one more thing: island affordability
For town employees, the proposed budget includes money for performance-based salary increases (up to 3%) effective in July.
Budget documents presented to the Town Council on Tuesday, meanwhile, disclosed that just under 40% of the town’s 247 employees live on Hilton Head.
“That’s a metric I think that we need to pay attention to,” said Ward 1 representative Alex Brown. “I don’t know what the new number should be, but it should be higher.
“If they (employees) choose to live somewhere else, that’s fine. But if it’s a cost thing, we need to start looking at filling that gap to some degree.”
This story was originally published May 7, 2022 at 5:30 AM.
