Hilton Head Town Council approves a budget that raises spending but lowers property taxes

The Hilton Head Town Council on Tuesday unanimously approved a $119.5 million operating budget for the 2023 fiscal year that is higher than last year’s spending levels but also includes a tax cut for property owners.

The budget is 23% more than the $96.8 million spent in 2022, but $22 million from last year’s budget is being rolled into 2023, Hilton Head Director of Finance John Troyer said.

Hilton Head’s property tax levy will go from 28.1 mills to 23.1 starting the 2023 fiscal year, Troyer said. The cut was expected.

Hilton Head implemented the 28.1 mill tax to create a natural disaster fund after Hurricane Mathew in 2016. The previous rate was supposed to conclude after five years, and Troyer said the town currently has $33 million for any future major weather events.

A mill is the rate of tax used to calculate local property taxes. One mill is equal to one-thousandths of a dollar per $1 of assessed property value. So the owner of a $400,000 home would save about $2,000 a year in taxes.

“The proposed budget is priority-based and is intended to advance Town Council strategic objectives. It reflects our on-going commitment to provide excellent municipal services for our community,” Town Manager Marc Orlando said in a news release.

The budget is broken into four categories of spending: the General Fund, Debt Service Fund, Capital Improvement Programs (CIP) and the Stormwater Fund:

While the General Fund is the largest, set at $48.6 million, the CIP Fund grew the most in the new budget.

▪ The town will spend $45.7 million on capital improvement programs, a 63% increase from 2022, and the approved fund includes money for a new affordable housing project, park and other infrastructure projects.

▪ Hilton Head will also increase spending for the Stormwater Fund with $5.8 million allotted — over $300,000 more from the previous year.

▪ The island’s debt spending will remain stable compared with 2022 with $19.4 going to that fund. Hilton Head currently has $92.6 million in bonded debt.

The new budget also creates a new director of public safety position and raises for council members and the mayor.

The position of public safety director will oversee community code enforcement, Troyer said in an interview. This position will act as a liaison between the island and nearby law enforcement agencies, as Hilton Head does not have its own police department.

“Town Council was very clear that they wanted more attention with those efforts and to keep as close a relationship as we could with other law enforcement agencies.”

The Town Council members also could be in line for a pay raise in the 2023 budget. The plan includes a proposal to increase council members’ base salary from $12,800 to $20,300 and the mayor’s base salary from $25,000 to $32,500.

The salary changes would take place after the next municipal election in 2023.

“In addition to investing in the community, this budget strongly invests in our employees by enhancing our benefits program and providing for professional development opportunities so that Town staff members can better serve our community,” Orlando said.

Troyer said the increases in salary were to make sure Hilton Head did not lose top executives.

“We have struggled with turnover in this economy,” Troyer said. “Wages are going up, and it’s (the salary increase) an acknowledgment that retainment of highly trained people is important and serves the town to keep our trained people than to lose them to other agencies.”

The town’s fiscal year begins July 1.

While the vote was unanimous, Ward 5 Councilmen Tom Lennox was not present.

This story was originally published June 8, 2022 at 2:22 PM.