Hilton Head Island's mayor tore up the script at the State of the Region breakfast Wednesday, instead tackling what he called the most important issue locally, nationally and globally: the financial crisis.

"Things are tough, and they look like they are going to be tough for a while," Mayor Tom Peeples said at the annual breakfast, sponsored by the Hilton Head Island-Bluffton Chamber of Commerce.

The discussion topics were supposed to be illegal immigration, school funding and the Bluffton Parkway. Those were the issues the local business community said were the most critical in an online poll conducted before the event.

But Peeples said the struggling economy takes precedence because the town will have to cut back on improvements and other programs throughout the community.

Peeples and Beaufort County Council Chairman Weston Newton outlined how the economic slowdown is playing out here.

For Hilton Head, a slowing economy means less income, Peeples said. The town's revenue from the real estate transfer fee fell to $2.9 million in the fiscal year that ended June 30, according to town data. In the previous fiscal year, that fee brought in $3.7 million. The record was $6.7 million in the 2004-05 fiscal year.

Construction permit fees also fell by about $100,000 between the 2006-07 and 2007-08 fiscal years.

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