BEAUFORT -- Tax bills are heading out to Beaufort County residents this week. But if a statewide 20 percent cap on property reassessment increases becomes law, local governments could find themselves with a budget shortfall of $40 million.

A cap would force the county to refund and re-bill property owners who paid too much, and prohibit the county from raising other residents' taxes to make up the difference, said county controller Tom Henrikson.

The General Assembly approved the cap in June, but Gov. Mark Sanford has delayed enacting the cap for almost five months to consider the legal and economic impacts.

Under this year's reassessment, the county's first since 1998, the value on some properties increased by more than 300 percent.

Although tax bills were sent out at market value, the county has gathered figures on what the reassessment cap could mean for tax revenue.

It's expected the cap could mean refunds in excess of $10 million for the county, $20 million for the school district and about $10 million for various municipalities and public service districts.

The governor is continuing to weigh the cap, said spokesman Will Folks.

Studies by the S.C. Chamber of Commerce and Clemson University's Strom Thurmond Institute have stated an assessment cap is a shift in the tax burden.

"There's been a lot of new viewpoints offered on this legislation and the governor is going to take the time to review them," he said.

Without a decision from the governor, tax bills were sent out based on the market value of the home, Henrikson said.

But the cap seems likely with the legislature prepared to override a veto if the governor sides against the cap.

As county property values continue to rise, the cap is necessary to ensure that some residents are not taxed out of their homes, said County Councilman Dick Stewart.

"The cap slows down the effect of the appreciation," he said.

Opponents have said it would bring a tax break for the wealthy while requiring a tax increase on the poor.

The cap may be good for some residents, Henrikson said, but the county budget would be drained because it could not recoup some tax dollars. Because tax bills have been sent out, Henrikson said the county is not able to increase taxes this year to make up the difference.

"The least cost to the county would be if the cap doesn't go through," he said.

The county, school district and various public service districts would have to borrow the money to fulfill budget needs, he said, putting the deficit and the cost of borrowing on top of next year's tax bill.

"If the tax bills do not cover the cost of operations ... the county must increase taxes in the next fiscal year to cover the cost," he said.

The appeals process is ongoing for some property owners unhappy with their reassessments, Assessor Bernice Wright said in a statement Thursday.

"Just because a person has received a tax bill, it doesn't mean an appeal has been resolved," she said.

Wright said her office has had about 5,000 appeals this year, about half the appeals in number that were filed in 1998.

Most residents have until Nov. 6 to appeal their reassessment by contacting the Assessor's Office at 470-2513.