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The bill protects federal highway funding for states that keep gas taxes under $0.50/gal, but it penalizes states that raise gas taxes—limiting state revenue options and risking reduced road maintenance, constrained investments in transit/climate, or shifted costs to taxpayers.
States that keep gasoline taxes below $0.50 per gallon avoid an 8% reduction in federal highway apportionments, preserving federal road funding and creating a strong incentive for states to maintain lower gas taxes.
Drivers, residents, and local governments in states that raise gasoline taxes to $0.50/gal or higher will face an 8% cut to federal highway apportionments each year, reducing funds for road projects and likely causing delayed or canceled repairs.
State and local governments are pressured to avoid raising gas taxes, which constrains their ability to fund climate programs, public transit, and local maintenance through revenue increases.
Taxpayers nationwide could indirectly face higher costs if states keep gas taxes low and instead cut services or shift to other revenue sources to make up funding shortfalls.
Based on analysis of 2 sections of legislative text.
Allows the Secretary of Transportation to withhold 8% of certain federal highway apportionments from any State the first fiscal year its gasoline tax reaches $0.50 per gallon.
Introduced April 13, 2026 by Kevin Kiley · Last progress April 13, 2026
Authorizes the U.S. Secretary of Transportation to withhold 8% of certain federal highway apportionments from any State on the first day of each fiscal year beginning with the first fiscal year after enactment in which that State’s gasoline tax is at least $0.50 per gallon. The change is added as a new provision in Title 23 of the U.S. Code and updates the title’s table of sections.