"Some of the taxes and fees being considered by Virginia lawmakers to fund the state's transportation needs could hit the neediest residents the hardest, according to a report released yesterday.

The report by the Commonwealth Institute for Fiscal Analysis, a nonprofit think tank focused on how fiscal decisions impact low-income Virginians, warned against sales and excise tax increases because they would disproportionately affect the state's low-income residents.

According to the study, the bottom 20 percent of Virginia wage earners -- those making less than $18,000 a year -- pay more in sales and excise taxes than all other income groups.

"A combination of the sales and excise tax increases being discussed could approach $100 in additional annual expense for Virginia's lowest-income households," Michael Cassidy, the institute's executive director, said.

The study comes as Gov. Timothy M. Kaine (D) and legislators prepare to return to Richmond next month for a special session on transportation funding.

Democrats want to raise taxes across the state to provide money for statewide projects. They are considering increases in the gasoline, sales and auto sales taxes, but they disagree over which to raise.

House Republicans, led by Speaker William J. Howell (R-Stafford), oppose any statewide tax increases. Instead, they want to revisit regional solutions for congested Northern Virginia and Hampton Roads, this time by allowing local elected governments to enact tax and fee increases.

The institute's report proposes creating a refundable sales tax credit and making the state's earned income credit -- the state version of the federal earned income tax credit -- fully refundable.

Cassidy said the institute is "agnostic" about whether such taxes should be collected regionally or statewide.

But whichever approach lawmakers take, they should keep in mind the poorest Virginians and "factor them out when calculating how much revenue" tax proposals would generate, he said. "Whether they are statewide or regional taxes, what we are talking about are regressive taxes, and even in more affluent areas like Northern Virginia, lower-income families will be hit harder."

Del. Brian J. Moran (D-Alexandria), who has sponsored legislation that would provide tax relief for the poor, said he agrees with the study.

"The gas tax is regressive, and when someone is drowning, it's no time to throw him an anchor," Moran said. "We are searching for appropriate user fees for those who use our highways while at the same time being fair to those who are eking out a living."

J. Gordon Hickey, a spokesman for Kaine, said the governor is well aware of the impact that taxes have on low-income residents. But chronic traffic congestion, Hickey said, is "a safety, environmental and economic development issue that has an effect on everyone."

The General Assembly passed a landmark package last year to pump $1.1 billion a year into transportation across Virginia. Regional authorities were set up to collect $400 million annually in Northern Virginia and $200 million annually in Hampton Roads.

But in a unanimous decision, the state Supreme Court ruled Feb. 29 that the regional authorities could not constitutionally levy taxes and fees because they are not elected bodies.

On Tuesday, a coalition of groups representing retailers, developers, real estate agents, contractors, teachers and localities called for increases in the sales tax or the gas tax, or both, to pay for road maintenance statewide.

Bob Chase, executive director of the Northern Virginia Transportation Alliance, a business-supported group that pushes for increased transportation funding, said congestion punishes everyone, rich and poor.

"The gasoline wasted sitting in traffic and the inability to get to jobs also pose a burden on working people," Chase said." (Eric M. Weiss, The Washington Post, May 9, 2008)