Rep. Kevin Kiley is proposing a federal bill to penalize states with gas taxes above 50 cents per gallon, cutting certain highway funds by 8 percent and pulling Congress into California’s long-running fight over fuel costs and energy policies. He argues the move would push states to roll back what he calls “excessive” gas taxes that contribute to higher prices at the pump.
His office said the penalty would apply to National Highway Performance Program and Surface Transportation Block Grant funds in states that exceed the threshold. Framing it as protection for drivers, Kiley said, “States that overtax their citizens to compensate for inefficient spending should not expect unlimited federal support,” according to Rep. Kevin Kiley's Office.
The move was first detailed by The Sacramento Bee, which reported that the federal push comes on the heels of recent state‑level skirmishes, including a bill that ordered a gas‑mileage study and stirred public anxiety about future costs. The Bee also noted that Kiley’s communications director, Louie Pirsos, said the formal bill text was not yet available as of Tuesday afternoon.
State policy already looms large in California’s pump prices. Data from the U.S. Energy Information Administration indicate that state excise taxes and related fees make up roughly 70 cents of every gallon sold in California. AAA’s state tracker also consistently places California among the most expensive markets for gasoline, a talking point Kiley’s team highlighted in rolling out the case for federal intervention.
Kiley, elected to the U.S. House in 2022, has made affordability and resistance to California regulators a recurring theme of his political brand, including a prominent role in efforts to recall Gov. Gavin Newsom, according to the Congressional Record and his office’s past statements. His new proposal slots neatly into months of criticism from Republican leaders who pin California’s lofty pump prices on state taxes, specialized fuel blends and environmental fees rather than broader market forces.
How the funding cut would work
The NHPP is the largest federal highway formula program and focuses on the National Highway System, from major pavement and bridge projects to key freight corridors. The STBG operates as a flexible block grant that states can spread across roads, transit, bicycle routes and pedestrian infrastructure. Those roles are laid out by the Federal Highway Administration. Because both programs feed significant, relatively flexible dollars into state transportation budgets, analysts at Transportation for America note that an 8 percent cut could ripple through many local projects, not just marquee highway work.
Legal questions
There is a long legal trail on Congress attaching strings to highway money. The Supreme Court’s decision in South Dakota v. Dole upheld a relatively small reduction in highway funds as a permissible condition on states’ behavior, as summarized by Justia. Later rulings, particularly NFIB v. Sebelius, signaled that the justices are willing to strike down funding conditions they view as coercive rather than merely persuasive, according to Justia. Whether an 8 percent haircut would be treated as a reasonable nudge tied to transportation spending or as unconstitutional arm‑twisting is an open question legal scholars say could hinge on how heavily states depend on those specific dollars.
Politically, the proposal is more starting gun than done deal. Kiley still has to formally introduce the bill and secure a committee hearing in the House. Any final change would need to clear both chambers of Congress and would almost certainly provoke sharp pushback from Sacramento, where state officials have long argued that California’s high prices are a complex mix of taxes, regulations and industry behavior. For now, Kiley’s announcement sets the stage for a high‑stakes fight over who pays for America’s roads and how far Washington should go in using its checkbook to steer state tax and regulatory policy.
