VIRGINIA FACES HIGHER GAS TAXES

DARLA MERCADO

RICHMOND, Va. -- Virginia retailers are bracing to fight a fuel-tax increase in the wake of the state's gubernatorial race.

Timothy M. Kaine, a Democrat, defeated Republican Jerry W. Kilgore with 52% of the votes to Kilgore's 46%. Kaine, a supporter of transportation reform in Virginia, may be considering raising fuel taxes as a source of revenue to aid in the state's dilemma of traffic congestion.

"We'll be looking at gas and transportation taxes -- they're on the table," said Michael O'Connor, president and chief executive officer of the Virginia Petroleum, Convenience and Grocery Association here. "People in the area say that it's been quite awhile since the last tax increase, so we're concerned."

The news may not bode well for VPCGA's more than 650 retail members and their customers, for whom higher taxes mean higher gas costs.

During his campaign, Kaine called for an amendment to Virginia's constitution that would ensure that new taxes go directly to the improvement of the state's transportation. In the past, revenues that were marked for the state's Transportation Trust Fund were diverted to other agencies.

As Kaine replaces outgoing Virginia Gov. Mark R. Warner, also a Democrat, O'Connor remains hopeful that the new policies will consider retailers and their possible plight in the face of a tax increase.

"Gov. Warner was very inclusive of the business community," he said. "We hope to see that continue with this new administration."