Hilton Head Town Council advances FY 2026 budget with property tax cut and major investments

As Hilton Head Island prepares for the start of its new fiscal year on July 1st, Town Council is advancing a proposed $174.7 million consolidated budget that aims to reduce the local property tax rate while prioritizing investments in infrastructure, public safety, housing, and cultural preservation.

The budget, unanimously approved at first reading on May 6th, includes a rare tax cut alongside major capital project funding and is designed to reflect the town’s broader vision of resilience, sustainability, and equitable growth. A second public hearing and final vote is scheduled for June 3rd.

“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.”

A 2-Mill Tax Cut, Offset by Revenue Diversification
The FY 2026 proposal includes a 2-mill reduction in the property tax rate, from 21.4 mills to 19.4 mills, expected to reduce revenue by approximately $2.3 million. Town officials say the reduction will be offset by increased income from diversified sources, including business license fees, hospitality and accommodations taxes, short-term rental fees, and state and federal grants.

A newly implemented beach parking program is projected to generate an additional $650,000, earmarked for beach access improvements and operations.

“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.”

Strategic Alignment with Long-Term Community Plans
The FY 2026 budget is guided by the Town Council’s 2023–2025 Strategic Action Plan, the 2020 Comprehensive Plan, and initiatives discussed during the February 2025 strategic planning workshop.

Strategic priorities include:

• Protecting the Island’s character through growth management
• Reinforcing resilience and upgrading stormwater infrastructure
• Supporting economic development and workforce housing
• Enhancing public safety and recreational facilities
• Preserving and investing in Gullah Geechee neighborhoods and culture

$77.7 Million for Capital Projects
Nearly $78 million of the budget is dedicated to capital investments:
• Beach renourishment: $47.5 million
• Roads and pathways
• Stormwater infrastructure upgrades

• Parks and open spaces
• Public safety facilities and equipment
• Affordable housing development

The town’s stormwater program alone will receive $11.1 million, continuing Hilton Head’s long-term commitment to environmental protection and flood mitigation. These projects are not expected to result in any rate increases in FY 2026.

Organizational Capacity and Public Service
The budget funds several new staff positions to improve public service and environmental management, including:

• Integrated Pest Management Technician
• Community Code Enforcement Officer
• IT Help Desk Technician

These additions are part of an effort to modernize operations, optimize costs, and maintain quality service delivery.

Other initiatives include:
• Continued updates to the Land Management Ordinance (LMO)
• Expanded community event programming
• Enhanced public amenities in parks and beach areas
• Investments in technology and public safety

Workforce Housing and Community Development
Hilton Head will continue expanding its workforce housing strategy, with $4 million allocated to housing development and stabilization efforts. Projects include:
• NorthPoint Development: A public-private partnership delivering attainable housing for island workers
• Muddy Creek Neighborhood Stabilization Plan: Infrastructure and housing improvements in a historically significant neighborhood
• Bryant Road Partnership Project: Additional housing development in coordination with private partners

Supporting Cultural Heritage and Nonprofit Partners
The FY 2026 budget designates $3.3 million for the Gullah Geechee Historic Neighborhoods Community Development Corporation (GGHNCDC). These funds will help preserve cultural heritage, retain land ownership, and support local development initiatives.

Another $1.99 million is allocated to nonprofit and partner organizations, including:
• Island Recreation Association: $1.25 million
• Coastal Discovery Museum: $141,650
• Mitchelville Preservation Project: $105,000
• Palmetto Breeze (Lowcountry Transit): $350,000
• Sea Turtle Patrol HHI: $97,500
• Beaufort County Economic Development Corp.: $42,000

Environmental and Community Resilience
The budget reflects a strong emphasis on environmental resilience and sustainable practices. Projects include:
• Shoreline stabilization efforts
• Expanded recycling programs at beach parks
• Implementation of a fully organic Integrated Pest Management program

These initiatives are intended to protect Hilton Head’s natural resources while supporting the island’s quality of life.

The full budget document and supporting materials are available at hiltonheadislandsc.gov/finance.

Editor’s Note: Information was sourced directly from the Town of Hilton Head Island’s public statements and budget documents as of press time. For the most up to date information visit hiltonheadislandsc.gov/budget/FY2026/