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The budget Hilton Head is passing for the new fiscal year reflects a conservative approach to spending as a rough economic forecast continues.
The town was set to approve a budget of about $60 million, down from a budget of about $73 million the previous year. This is the second year in a row Hilton Head has been scaling back its typically comfortable budget. The town also realizes it is out of options for new revenue without a property tax hike: it has maxed out the new taxes it can enact and, with space for new homes on the island shrinking, the tax base isn’t expected to increase significantly.
Much of the discussions about cutting spending took place in the fall when the town reevaluated and modified its list of capital projects, which include plans for roads, parks, pathways and other public construction. Some projects on that list were nixed all together, while others were pushed back. The town also changed the way it accounts for those projects – instead of spanning multiple years, a project will only show up in the budget for the year it begins, town manager Steve Riley said. That accounting change alone lowered the capital budget by almost $20 million this year.
The town has already been eliminating some staff positions through attrition, freezing pay raises, cutting travel and other expenses over the past year, Riley said. But some key projects will still take place during the new budget year, he said. The town is planning to finally move forward with one project to rebuild the Land’s End groin in Sea Pines and another to rehabilitate a rapidly eroding section of the beach at the heel of the island off Port Royal Plantation. The heel project is still several months away, but the budget includes $500,000 for the work to renourish the beach.
