LANSING – Despite the high cost of gasoline, Michigan is not seeing a boost in sales tax revenues from those prices.

The response came from State Spokesman Terry Stanton, responding to arguments made last week by Mike Nystrom, vice president of the Michigan Infrastructure and Transportation Association, who said after Governor Jennifer Granholm said she did not support increasing the gas tax that perhaps the state should look at scaling back the sales tax on fuel sales.

Most the sales tax goes to Michigan’s School Aid Fund instead of transportation projects, Nystrom said at that time, and charged that “taxpayers should recognize the state is reaping as much of a windfall on the price of gas as some of these oil companies,” saying that sales tax collection on fuel prices has risen from $330 million in 2002 to $664 million in 2007.

But Stanton said in a letter that overall sales tax revenues show the state is not seeing any dramatic increase. In fact, overall sales tax revenues are down, he said.

Preliminary projections for the end of the fiscal year show the state will have netted $80 million less in sales tax revenues than the year before, Stanton said.

Since 2002, sales tax revenues are only up a total of 1.7 percent, Stanton said, and when adjusted for inflation are actually down by 11 percent for the same time period.

While it is true that as the cost of gasoline rises, more tax is collected per gallon, Stanton said: “High gas prices often make consumers either cut back on the amount of driving the do or cut back on other, discretionary purchases.” As an example, he said total sales tax revenues on new and used vehicle sales have fallen by $350 million, or more than 33 percent, between fiscal year 2002 and 2007.

On Friday, the County Road Association of Michigan joined MITA in criticizing the governor’s comments that she could not support a gas tax increase. John Niemela said the state’s highway and road systems desperately need more revenue to be able to keep roads maintained. Unless revenue increases are enacted soon, road maintenance could be cut back drastically.

Niemela said the average motorist spends less than $1 a day on the roads in the state.

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