California congressman drafts bill to punish states with high gas taxes

Federal funding cut targets five states

Rep. Kevin Kiley, a Republican from California, announced on Feb. 10 that he is drafting a federal bill aimed at states with gas taxes above 50 cents per gallon.

States that exceed that mark would lose 8 percent of their funding from two major federal highway programs: the National Highway Performance Program and the Surface Transportation Block Grant Program.

The bill has not been formally introduced yet, and no official text was available as of Feb. 11.

California has the nation’s highest gas tax

California’s state excise tax on gasoline sits at 61.2 cents per gallon, the highest in the country. Factor in other state fees, and the total burden reaches about 70.9 cents per gallon, according to the Tax Foundation.

Drivers also pay the federal gas tax of 18.4 cents per gallon on top of that.

A 2017 state law known as SB 1 requires the excise tax to adjust every July to keep pace with inflation, so the rate keeps climbing.

Kiley says states should lower taxes

Kiley represents California’s 3rd Congressional District, which covers parts of the Sacramento area and the Sierra Nevada.

He said states that overtax their residents to cover wasteful spending “should not expect full federal support.”

He compared the approach to existing conditions already tied to highway money, like rules on the national drinking age and truck weight limits.

Fuel costs and state regulation have been a regular focus throughout his time in Congress.

Four other states would face cuts

California would not be alone. According to the California Tax Foundation, four other states have gas taxes above 50 cents per gallon: Washington, Illinois, Indiana, and Pennsylvania.

Pennsylvania’s tax is 57.6 cents per gallon, second only to California. Washington crossed the 50-cent line after its gas tax rose by 6 cents per gallon in July 2025.

All five states would stand to lose a share of their federal highway funding under Kiley’s proposal.

Gas tax brings in billions for roads

California’s gas tax is the main source of state funding for highways and roads.

The nonpartisan Legislative Analyst’s Office expects the tax to bring in about $7.6 billion from gasoline purchases. In fiscal year 2024, it generated close to $8 billion.

That money pays for highway maintenance, road repairs, bridge work, and transit programs across the state. Losing 8 percent of federal highway funds on top of that could squeeze transportation budgets even further.

SB 1 raised the tax in 2017

California’s gas tax jumped in 2017, when the state legislature passed SB 1, the Road Repair and Accountability Act. The law raised the gas tax by 12 cents per gallon and added new vehicle registration fees.

Lawmakers designed it to invest roughly $5 billion a year in the state’s transportation system. It also built in annual inflation adjustments, which explains why the rate has continued to rise each year since then.

Voters kept the tax in 2018

In November 2018, California voters got a chance to repeal SB 1 through Proposition 6. The effort failed.

Roughly 57 percent of voters chose to keep the gas tax in place.

Supporters argued that repealing it would cancel thousands of road and bridge projects already underway.

Opponents said the tax placed an unfair burden on working families and that the state had enough money to fix roads without it.

Newsom’s office pushes back hard

Gov. Gavin Newsom’s office criticized Kiley’s proposal. A spokesperson said the gas tax funds safer roads, bridge repairs, and efforts to reduce air pollution.

The governor’s office also pointed out that while California receives the second-highest total amount of federal highway funds, it ranks third-lowest on a per capita basis.

Cutting that funding, the statement said, would lead to more potholes, longer commutes, and dirtier air across the state.

California drivers already pay the most

According to AAA, California consistently has the highest average gas prices in the country. State taxes and fees make up a big share of the per-gallon cost, but they are not the only factor.

Regulations and limited refining capacity also drive prices up.

California requires a special fuel blend not used in other states, which limits its ability to import gasoline from elsewhere.

The state has also seen its active refineries shrink from more than 40 in the 1980s to around seven today.

Bill faces a long road in Congress

Kiley’s proposal still needs to be formally introduced and assigned to a House committee. From there, it would need to pass both the House and the Senate before reaching the president’s desk.

Legal experts have noted that using federal highway funds to influence state tax policy raises constitutional questions.

The Supreme Court has upheld some conditions on highway funds in the past but has also warned against conditions that cross the line into coercion.

Gas prices remain a flashpoint in California

Kiley’s federal push comes during a larger battle over fuel costs in the state. In 2025, changes to California’s Low Carbon Fuel Standard added new costs on top of the gas tax.

Two major California refineries are scheduled to close, which could further tighten the state’s fuel supply.

California Republicans in Congress sent a letter to Newsom in June 2025 urging him to suspend gas tax increases and pause new fuel regulations.

What happens next

Kiley’s office said the formal bill text is still being finalized. Once introduced, it would need a committee hearing before it could move forward.

Even if it passes the House, it would face strong opposition from California’s state government and likely from Democrats in Congress. For now, California’s gas tax remains in place.

The next annual inflation adjustment is expected in July 2026.

This article was created with AI assistance and human editing.

Read more from this brand:

• House GOP Gets Fractured by Healthcare Subsidy Fight
• Wisconsin Republicans file OMAR Act to ban campaign payments to spouses
• 11 Democrats help Republicans pass bill to boost your shower pressure