The House bill received strong approval in the final hours of the legislative session last June, but questions over the cap's impact on some taxpayers and schools and Gov. Mark Sanford's December veto led a majority of supporters to seek alternatives, upholding the veto, 76-33.
Under the cap, a home that was taxed at a $100,000 value for 2004 tax bills would only be taxed up to $120,000 for 2005 bills, regardless of how much it appreciated.
Some Beaufort taxpayers had followed the cap legislation closely after property reassessments last year had some homeowners seeing property values more than five times what they were in 2003.
Rep. Catherine Ceips, R-Beaufort, and Rep. Bill Herbkersman, R-Bluffton, voted again to support the tax cap. Freshman Rep. Richard Chalk, R-Hilton Head Island, had opposed the cap in the past, but also voted to override the governor's veto.
Rep. Thayer Rivers, D-Ridgeland, who again opposed the cap, said the House's shift on the tax cap was likely due to several reports critical of the plan.
Studies released this summer on the impact of the bill from Clemson University and the S.C. Chamber of Commerce indicated the bill would shift the tax burden to properties that did not appreciate greatly, often impacting businesses and middle- and lower- income housing.
"It was fairly obvious it was a tax shift and not a tax cut," Rivers said.
The cap's loss now means Beaufort officials can set aside costly contingency plans. County finance officials had predicted tax refunds required under the cap would have left a $40 million hole in local government budgets.
With tax bills being collected on the fair market value of homes, local governments would be forced to refund overbilled taxpayers with no source of funding to cover that cost.
Though he expects the debate over tax reform likely will continue, County Administrator Gary Kubic said he was pleased that the county did not have to pursue complicated refund and borrowing scenarios necessary under a cap.
"Even though we had thoroughly prepared for the 20 percent cap, not having to go forward with it mechanically is of great relief for me as an administrator," he said.
But local legislators are hopeful any new property-tax relief bills will include a rollback to include current Beaufort County tax bills if it can be bore by the local governments, said Rep. Bill Herbkersman, R-Bluffton.
"I don't want to hurt municipalities, but we can't stand by and let people lose their property," he said.
Though a consistent opponent of the tax cap, Rivers said he would stand with the local delegation in finding alternative tax relief that works.
"We're all singing off the same sheet of music," he said. "We just have a different way of getting there."
Ceips said many legislators in growing communities like Beaufort see property tax relief as a priority.
"Everybody needs property tax relief," she said.
Chalk questioned the legality of the tax cap but said Wednesday that he supported an override to give Beaufort legislators time to come up with alternatives.
Beaufort County had mulled its own 15 percent property tax cap, but eventually ruled out the option eyeing potential legal wrangling and recognizing a tax shift.
The governor noted several constitutional hurdles in his veto, chief among those was the state requirement that all property be assessed at fair market value.
The governor is prepared to accept sound property tax relief, spokesman Will Folks said after the vote.
"The governor said in his veto message that he was prepared to look at different proposals on the property tax front that passes constitutional muster," Folks said.
In his veto, the governor also pointed to education funding concerns that he said had been confirmed by the state's revenue and education departments.
Property values are a main indicator in the state's funding distribution to school districts. A majority of South Carolina districts would see less state funding under the plan, the veto stated.
Legislation by Rep. Catherine Ceips, R-Beaufort, that would have tried to increase support for the state's military bases also failed Wednesday after the House voted 94-20 to sustain the governor's veto.
The legislation would have created a military preparedness panel to aid the state's military bases in current and future attempts by the military to eliminate some installations.
The military is pursuing base realignment and closure plans expected to shutter about 25 percent of the country's bases.
With a task force already working to combat base closure, the governor stated Ceips' panel would have duplicated services.
Ceips said Wednesday that she asked house members to sustain the governor's veto, deferring the work to the governor's panel.
"We're hinging on the governor's task force," she said.
Though Rep. Walter Lloyd, D-Walterboro, was not present for Wednesday's vote, he said Wednesday night that he agreed property tax relief was needed.
"Something needs to be done, but a tax cap isn't the answer," he said.