Gov. Mark Sanford on Friday vetoed a bill aimed at providing property tax relief, leaving state lawmakers to struggle over whether to override or try again with new legislation.

The bill, which passed overwhelmingly on the last day of the legislative session in June, would have prevented local governments from raising property values more than 20 percent during reassessments.

Sanford explained at a news conference Friday that he had spent months weighing his support for low taxes against concerns that the bill was unconstitutional and could indirectly hurt schools.

Just after noon, seven months after it landed on his desk, Sanford announced he couldn’t support the bill.

“Let’s go back to the drawing board ... if you will. There are other ways of solving this problem without breaching the constitution ... or causing unintended consequences.”

The decision was a relief for local officials, who had scrambled to figure out how to handle pending reassessments while they awaited Sanford’s decision. Counties are required to reassess property values for tax purposes every five years.

After Friday’s news conference, prominent opponents of the bill — including lobbyists for the S.C. Chamber of Commerce and the state School Boards Association — shook Sanford’s hand and thanked him.

“This means we continue to have a fair property tax system,” said Hunter Howard, president and chief executive officer of the state chamber.

But lawmakers, who had hoped the bill would protect property owners from skyrocketing tax bills, said they were disappointed.

“We’ll be back,” said Sen. Scott Richardson, R-Beaufort. “People are being taxed out of their homes because of paper wealth.”

Lawmakers now must decide whether to override the veto, which takes a two-thirds vote of the House and Senate. The General Assembly returns Jan. 11.

House Speaker David Wilkins, R-Greenville, said it was too early to say what the House will do. “We just need to digest what the governor said.”

The bill violated the constitution in two ways, Sanford said:

• Property taxes would not be based on fair market value, as required in the constitution.

• A bill giving a tax exemption requires a two-thirds vote, but the Senate gave it a voice vote, so there is no record of how each senator voted.

Sanford also said the bill would throw off the state’s school funding formula, which gives poorer districts more money than wealthier districts.

Limiting reassessments, Sanford said, would make rapidly growing districts look less wealthy and leave less money for poorer districts.

The veto was a win for businesses, people whose property isn’t rapidly increasing in value, and schools and local governments.

A study by the state Chamberof Commerce in October found that capping property reassessments would shift more of the burden of funding local government to taxpayers whose property value increases are less than 20 percent — often businesses and low-income homeowners.

That could force tax increases for all taxpayers as high as 50 mills, the study found.

But the decision was a loss for property owners who have seen eye-popping increases on their tax bills. Some Richland County homeowners saw their assessments jump 50 percent or more in 2004.

“Oh, no!” 59-year-old Florence optician Leonard Harrington Jr. said when he heard about the veto. “We all were praying that the governor would sign it.”

Many Florence homeowners were recently hit with big, new property assessments.

“We are blessed that we have nice homes,” Harrington said. “But we can’t continue to enjoy them and pay these assessments and maintain our sanity. Hopefully, the Legislature will be able to work something out.”

Richardson, the Beaufort senator, and Sanford said they would be open to a plan that would allow reassessments only when property changes hands.

Richardson plans to introduce a bill that would give counties a small, automatic, regular tax increase but limit reassessments to the time of sale.

Rep. James Smith, D-Richland, prefers a solution that would target the help to people who risk losing their homes because they can’t afford their taxes.

Rep. John Graham Altman, R-Charleston, blamed “greedy” school boards and city and county councils for raising property taxes.

Altman said the governor might be legally correct in his veto, “but as legislators we have to respond to the public and their needs. Gosh, this is frustrating. These taxes are eating people alive.”

But Richland County Assessor John Cloyd called Sanford’s decision “courageous.”

“It was the right decision,” he said.

Cloyd likes Smith’s idea, but property tax breaks such as Richardson’s would mean neighbors whose homes are worth the same could have dramatically different tax bills depending on when they bought their homes.

Such solutions are “shell games,” Cloyd said. The real problem is that school expenses are skyrocketing — not that property taxes are out of control.

“Until somebody stands up and faces that we have a school funding problem and raises the revenue,” he said, “we will continue to have these crises.”

Reach Talhelm at (803) 771-8339 or jtalhelm@thestate.com