Funding transportation with a regressive and distortionary sales tax, rather than still-ridiculously-inadequate user fees (that should be way higher on Pigouvian grounds), is nothing short of horrific to my mind.
Note the description says "state sales and use taxes". As I said above I'd need to know the details, such as how much of an increase we're talking about and on what items, but I should point out that increase in things like the gas tax doesn't just affect only outer suburbanite and exurbanites who commute more than 25 miles one way to work or even only people who drive at all. If transportation costs go up, the cost of everything does, food prices will increase if transporting them becomes more expensive. Of course this doesn't mean we shouldn't have a gas tax but anyone who thinks gas prices should be forcibly increased above $6/gallon or so is deluding themselves if they think there won't be any immediate negative effects on all segments of the population. It's also worth nothing that conversely improving transportation reduces transportation costs, so if done properly (once again, details needed), increasing the sales tax here might decrease prices in the long run (also a point I make about the gas tax, I'm reminded of McCain and Hillary's very stupid gas tax holiday proposal in 2008 and pointing out why it was such a bad idea that wouldn't benefit anyone.)
And, also, calling property taxes "regressive" is bizarre. They're not perfectly progressive, sure, but are people who rent (or live with family, or in public housing) that invisible to you?
Well higher property taxes will increase rents. Minnesota has a unique solution for this, renters can apply for a special tax credit that gives them an additional refund (I'll be getting mine in a week or so) based on rent paid and income. But that's just Minnesota.
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