FY 2026 Proposed Consolidated Budget lowers property tax rate and invests in strategic priorities

Town Council advances $174.7M budget at first reading featuring property tax relief, increased fund reserves, accountable debt management, and investments aligned with Town Council’s strategic vision.

At its regular meeting on May 6, the Hilton Head Island Town Council approved (7-0) the first reading of the Town Manager’s proposed fiscal year (FY) 2026 consolidated budget, a balanced and strategic financial plan totaling $174,711,350 million in projected revenues and scheduled expenditures. It spans six major funds and includes a 2-millage (mills) property tax rate reduction, decreasing the rate from 21.4 mills to 19.4 mills, and reflects the Town’s ongoing commitment to fiscal responsibility and service to residents.

“This budget allows us to move forward on protecting our Island’s character, investing in resilience, and strengthening community services,” said Mayor Alan Perry. “The Town Manager and his staff have done a fantastic job of bringing forward a balanced budget that eases some of the tax burden on our residents, puts shovels in the ground on some big projects, plans for future capital investment and economic growth, and creates some tangible, long-awaited improvements in our land management ordinance. I encourage everyone to do a deep dive into this budget because I think our community will be pleased with how well it positions us for success.”

Town Manager Marc Orlando presented the proposed budget, emphasizing its alignment with the Town Council’s current 2023-2025 Strategic Action Plan, the 2020 Comprehensive Plan, and preliminary strategic priorities developed during the February 2025 Strategic Planning Workshop. Those strategic priorities include:

• Protect the Island’s Character through Growth Management.
• Enhance Major Corridors and Streets.
• Assess and Reinforce Island Resilience.
• Upgrade Stormwater Infrastructure and Additional Capital Projects.
• Enhance Public Safety Readiness and Facilities.
• Support Economic Development and Business Retention.
• Advance Workforce Housing Opportunities.
• Preserve and Celebrate Gullah Geechee Culture and Neighborhoods.

In support of these community priorities, the budget is also intended to:

• Enhance community amenities, including recreation, leisure, and public facilities.
• Maintain high-quality municipal services delivered efficiently and effectively.
• Foster a workplace culture focused on innovation, customer service and employee engagement.
• Protect and elevate the Island’s identity, including its environmental and cultural assets.
• Leverage fiscal planning as a tool for progress, innovation, and continuous improvement.

“This budget reflects our commitment to renourishing our beaches, breaking ground on major capital improvement projects, improving our public services, and enhancing public safety—while lowering the tax burden for our residents,” Orlando said. “It’s a plan designed to improve quality of life through investments that matter most to our community.”

Proposed Budget highlights include:

• Balanced $174.7 million budget across six major funds:
  • General Fund ($59.7M).
  • Capital Improvements Program (CIP) Fund.
  • Beach renourishment ($47.5M).
  • Other capital improvement projects ($30.2M).
  • Debt Service Fund (18.9M).
  • Stormwater Utility Fund ($11.1M).
  • Workforce Housing Fund ($4M).
  • Gullah Geechee Historic Neighborhoods Community Development Corporation Fund ($3.3M).
• Tax Relief, Revenue Strategy and Fiscal Diversification:
  • 2-mill reduction in the Town’s property tax rate. This decrease will result in approximately $2.3 million less in General Fund and Debt Service Fund revenue, reflecting the Town’s continued commitment to easing the tax burden on residents and property owners.
  • Sustained investment capacity supported by a diverse portfolio of revenue sources, including business license fees, accommodations and hospitality taxes, applicable user fees, and competitive state and federal grant awards.
  • The addition of $650,000 in projected new revenue from the launch of the beach parking program, providing dedicated funding for access improvements and beach operations.
  • Continued benefit from new revenue streams created in recent years, including those tied to short-term rental regulations and fees.
  • An increase in the fund balance reserve across several major funds, including the Beach Preservation Fund and the Natural Disaster Fund, reflecting the Town’s commitment to ensuring adequate resources for long-term sustainability and resilience.
• Capital Project Investments:
  $77.7 million allocated to capital projects, including:
  • Beach renourishment ($47.5 million).
  • Road and pathway improvements.
  • Stormwater management upgrades.
  • Streetscape enhancements.
  • Parks and open space.
  • Public safety facilities and equipment.
  • Workforce housing initiatives.
• Organizational Capacity, Public Service, and Community Experience:
  • New Full-Time Positions: Added positions in Integrated Pest Management, Community Code Enforcement, and Information Technology (Help Desk Technician) to support new Town Council policy and associated programs, improve service delivery, environmental stewardship, and internal support.
  • Operational Efficiencies: A targeted decrease in operating expenses through strategic cost reductions and resource optimization without compromising service quality.
  • Land Management Modernization: Continued support for the comprehensive update to the Land Management Ordinance (LMO), enabling more effective land use policy and community development practices.
  • Community Investment and Engagement: Increased funding for staff training and development, community events, and expanded cultural programming, including enhanced holiday lighting and seasonal celebrations.
  • Public Space Enhancements: Targeted improvements to amenities in Town parks and beach parks to elevate recreational opportunities.
  • Technology and Operational Advancements: Investments in new and existing technology and systems to improve Town operations, customer service, and responsiveness.
  • Public Safety and Enforcement Support: Strengthened funding for public safety, including program enhancements for Fire Rescue, Shore Beach Services, and expanded Community Code Enforcement efforts.
• Affiliated Agency Partnerships:
  $1.99 million in funding support allocated across nonprofit and community partners:
  • Island Recreation Association ($1,252,366).
  • Coastal Discovery Museum ($141,650).
  • Mitchelville Preservation Project ($105,000).
  • Lowcountry Regional Transportation Authority (Palmetto Breeze) ($350,000).
  • Beaufort County Economic Development Corporation ($42,000); and
  • Sea Turtle Patrol HHI ($97,500).
• Stormwater System Investment and Resilience:
  • The FY26 budget allocates $11.1 million to the Town’s stormwater program—without any rate increase—demonstrating a commitment to environmental resilience.
  • Increased investment in the management, construction, and maintenance of critical stormwater infrastructure.
  • Enhanced program efficiencies to ensure long-term system performance and flood mitigation.
  • Ongoing efforts to safeguard water quality, reduce environmental impact, and improve drainage capacity across the Island.
• Gullah Geechee Historic Neighborhoods Community Development Corporation (GGHNCDC):
  • This investment reinforces the Town’s commitment to cultural heritage, land retention, and community-led development.
  • Funding will assist with operational capacity, GGHNCDC Board of Director strategic initiatives, technology and wayfinding signage, capital outlay, land acquisition, and programs that promote economic empowerment, neighborhood and housing stability, and the protection of Gullah Geechee traditions for future generations.
• Environmental Resilience:
  • Funding for several environmental initiatives including shoreline stabilization projects, beach park recycling enhancements and support for a fully organic Integrated Pest Management (IPM) program.
  • These initiatives are designed to protect our environment, preserve quality of life, and ensure long-term community and ecological health.
• Workforce Housing Program:
  • The FY26 budget continues the Town’s strategic commitment to advancing workforce housing opportunities and neighborhood stabilization through targeted public-private partnerships and capital investments.
  • NorthPoint Development: Continued investment in the NorthPoint project, a public-private partnership focused on creating attainable workforce housing opportunities for island workers and supporting land development aligned with the Town’s long-term land use and housing goals.
  • Muddy Creek Neighborhood Stabilization: Implementation of the Muddy Creek Neighborhood Stabilization Plan through dedicated capital funding, supporting infrastructure improvements, housing preservation, and community resilience in this historically significant neighborhood.
  • Bryant Road Public-Private-Partnership and Other Housing Initiatives: Advances the Bryant Road public-private partnership project along with various workforce housing efforts.

The public will have three more opportunities to learn more about and provide feedback on the proposed budget. These opportunities are scheduled for:

• Monday, May 12 at 2 p.m. – Town Council budget workshop.
• Tuesday, May 13 at 2 p.m. – Town Council budget workshop for capital improvement projects.
• Tuesday, June 3 at 3 p.m. – Second public hearing and final reading at the Town Council meeting.

The public can view the budget sessions on the Town’s YouTube Channel and the Beaufort County Channel. Citizens who wish to address the Town Council about the budget during any of the scheduled meetings should sign up to speak online or contact the Town Clerk at 843-341-4701. Public comment sign up will also be available in person within Council chambers prior to the beginning of each meeting. Citizens must sign-up prior to the start of meeting business to address Town Council during the public comment period.

The full proposed FY26 consolidated budget and presentation are accessible on the Town’s website at hiltonheadislandsc.gov/finance