Hilton Head Island approves largest budget in town history for 2025 fiscal year (2024)

HILTON HEAD ISLAND — An ambitious list of capital improvement projects have placed Hilton Head’s 2025 fiscal year budget as the largest in town history. Town leaders say it symbolizes an investment in the island’s future.

The $166.9 million consolidated budget for fiscal year 2025 begins July 1 and runs through June 30, 2025. Despite the record-breaking amount, the new budget, which is a 13.5 percent increase over the previous fiscal year, comes without a property tax increase.

“This budget encompasses the Town Council’s top 15 Strategic Action Plan priorities,” said Town Manager Marc Orlando. “Remarkably, a high point of this budget is our ability to continue reducing our debt burden, which is attributed to our strong economic base and solid management of our resources.”

Councilwoman Tamara Becker was the only council member to vote against the budget’s approval. She raised concerns on how funding is allocated to affiliated agencies and suggested the town look to reduce millage.

“Just because we have a surplus of money doesn’t mean that we necessarily have to find ways to spend it,” Becker said. “I think there’s certainly a conversation that should be being had about reduced millage with the extra money that we have sitting in the budget instead of looking for new ways to spend it.”

Hilton Head Mayor Alan Perry noted that fund balances have grown over time in part because projects allocated certain funds haven’t yet broken ground.

“We have talked about revenues dropping, and how we address that in the future is going to be vital to maintain what we put into place,” Perry said. “I do feel very confident and understand the input that has been given from everybody and also to the operational side of maintaining the dollars that we spend.”

The consolidated budget is made up of six funds:

General Fund of $60.9 million includes the town’s basic operations, public safety and affiliated agency funding. It is primarily supported with revenue from property taxes, business licenses, local accommodations tax (ATAX) and permit fees.

Capital Projects Fund of $74.4 million supports work that will enhance the quality of life for the community. Beach renourishment is filed under this fund and is estimated at $16.5 million in 2025. The preservation method excavates and transports sand from offshore sites to replace sand lost to natural erosion. The town engages in the process every eight to 10 years.

Stormwater Utility Fund of $7.5 million provides resources to protect Hilton Head Island from flooding, protect watersheds and sustain the island’s water quality.

Housing Fund of $4 million provides funding to implement the town council adopted Workforce Housing Framework.

Debt Service Fund of $16.7 million accounts for accumulation of resources (property taxes, transfers in of beach preservation fees, hospitality taxes, natural disaster fund and tax increment financing fees) to pay interest and principal on general long-term debt obligations and special revenue debt obligations.

Gullah Geechee Historic Neighborhoods Community Development Corporation Fund of $3.4 million supports the continuing operation of the organization and community investment through revitalization of economic opportunity and quality of life for the island’s historic neighborhoods.

The capital improvement program takes by far the largest slice, claiming $74.3 million — about 45 percent — of the $166.9 million total budget. That’s a $19 million increase over the prior year’s capital improvement program.

While a large chunk of that funding will be dedicated to the town’s beach renourishment program, town staff outlined a diverse range of projects, including park renovations, pickleball court construction, updated pathways and facilities for beach-accessible wheelchairs.

Councilman David Ames called the budget “an investment for the benefit not only of residents today but those who choose to come here in coming years.”

“One way of looking at the consolidated budget is about $100 million is to keep the train running on time, about $74 million is what gives this community personality and character, the excitement, energy and things that bring people to this community,” Ames said.