Launching his new study commission on transportation this week, Gov. James S. Gilmore III reignited the debate over taxes that helped catapult the conservative Republican into office 18 months ago.

In doing so, he jabbed a verbal elbow into the ribs of a Democratic predecessor and may have provided legislative candidates in both parties political fodder for the fall elections, when every General Assembly seat is on the line.

Gilmore, commissioning a 21-member panel to overhaul the state's road, rail and port systems, made it emphatically clear that he opposed any tax increase to ease congestion, prompting some howls from Northern Virginia business leaders.

A day later, stuck in a Washington traffic jam but calling into his scheduled WTOP radio talk show on his car telephone, Gilmore reiterated his point.

"Smaller minds and people who just aren't very thoughtful immediately say, 'Well, you got to have more money, then obviously you gotta go raise taxes,' " Gilmore said.

"That's not true at all," he added. "Good Lord, let's get innovative and creative and start to think about things instead of just always diving into taxpayers's pocketbooks."

Then, in an evident shot at developers such as John T. "Til" Hazel Jr. who have criticized him for not finding more road building money, Gilmore contended that his affluent critics believe mistakenly that higher taxes are a promising solution to highway problems.

"They're rich and they're powerful and they've forgotten about the average working man and woman," the governor said.

The two-day tempest over higher taxes for roads may be a summertime blip this far in advance of November, but it could help frame an important issue in closely contested races where workday problems such as commuting time, highway safety and mass transit can alter elections. Republicans and Democrats are fighting ferociously for control of an evenly divided General Assembly.

Democrats pounced on Gilmore's remarks, saying they were instant ammunition for their candidates for the House of Delegates and state Senate.

"This tax phobia is very clearly leading to bad public policy," said Craig K. Bieber, the party's executive director.

Bieber and other critics complain that Gilmore has stacked his commission with conservatives who will ignore the possibilities of any new taxes or fees, a major infusion of money into mass transit or better tools to manage growth. "He's setting it up for failure," Bieber said of the governor.

Several Democrats in Northern Virginia said transportation--and new funding initiatives--must be a key issue in the fall.

"I will definitely be talking about more money," said Del. Linda T. "Toddy" Puller (D-Fairfax), a House Transportation Committee member who hopes to move on to the state Senate this year. "Clearly, it's something all of us up here will be talking about."

Del. Brian J. Moran (D-Alexandria), Puller's committee colleague, added: "The time for action is now. I see no action coming out of the governor's office. We can't avoid the fact that things are going to cost money."

Gilmore, elected chiefly on his pledge to eliminate the state car tax, is in a way attempting a difficult balancing act, assiduously courting Northern Virginia's enormously rich business communities while insisting on wise spending for the roads that get their employees to work.

As an alternative to higher taxes, Gilmore and his allies want to look at how Virginia's federal transportation money gets spent. Among the measures being discussed: Adding lanes to existing highways instead of building new ones and redistributing state money among existing road projects.

In his remarks to the commission's inaugural meeting, Gilmore ridiculed former governor Gerald L. Baliles, a Democrat who in 1986 had steered through the legislature a massive tax increase for roads, for a speech in Roanoke last month in which he called again for new taxes to meet the state's growing transportation needs.

"We must also resist the siren song--the Lorelei of Virginia politics--that we can just get along with an incremental fix here or a commission there, or that somehow these things will take care of themselves on someone else's watch," Baliles said.

By confronting that rhetoric last week in a manner unusually personal between governors, Gilmore put a marker down that his fight to keep taxes low will be a core theme of the fall elections, his advisers said, just as it was in his 1997 campaign for governor.

"There is clearly a line being drawn in the sand on tax issues," said Mark A. Miner, Gilmore's press secretary. "It's a clear battle of philosophies, a classic match-up. The Democrats--their first answer to any problem is to raise taxes.

"The governor clearly understands that people are tired of sitting in traffic," Miner said. "He just wants solutions that are more creative than just raising taxes."

Virginia currently taxes gasoline at a rate of 17.5 cents a gallon; the federal government slaps an 18.4-cent tax on the same gallon.

After the General Assembly session this winter, Gilmore reluctantly signed into law more than $200 million in new road bonding authority to satisfy allies in rural Southside and Northern Virginia, including chief sponsor Del. John A. "Jack" Rollison III (R-Prince William), co-chairman of the House Transportation Committee.

Commission Chairman J. Kenneth Klinge, of Alexandria, perhaps better known as a Republican Party strategist than as the transportation expert he is, said his panel will try to balance regional and fiscal needs without endorsing pet transit projects across the state.

"I don't necessarily believe people want to raise taxes without knowing what they're going to be used for," Klinge said. "The governor has been pretty clear on this subject for some time."

Gilmore ordered his commission to produce an interim report by year's end and a final report by December 2000.

CAPTION: Gov. James S. Gilmore III (R) asked the members of his transportation panel to infuse new thinking, not new taxes, into the state transportation needs.