Sales tax rate increased by three-eights on one percent and receipts dedicated for housing purposes; homeownership opportunity fund, community and household stability fund, and rental opportunity fund created; fund councils created; appointments provided; reports required; and constitutional amendment proposed.
If passed, the bill will significantly enhance the funding available for housing initiatives in Minnesota. The new tax rate will apply to taxable sales from July 1, 2027, and last until June 30, 2052, with dedicated receipts intended to be appropriated by law. The funds will provide a supplementary source for existing housing programs, aiming to alleviate barriers to homeownership and improve the living conditions of low-income and vulnerable households throughout the state. The bill also emphasizes the generation of additional resources for emergency financial, legal, and educational services related to housing.
HF3279 proposes an amendment to the Minnesota Constitution aimed at increasing the sales tax rate by three-eighths of one percent, specifically to create dedicated funds for housing-related initiatives. This bill outlines the establishment of three key funds: a homeownership opportunity fund, a community and household stability fund, and a rental opportunity fund. The funds are designed to assist in various housing affordability and stability efforts, including home buy assistance, rental assistance, and support services for homeless individuals or those at risk of homelessness.
As proposed, HF3279 may spark debates regarding the increase in sales tax, particularly in the context of financial burdens on residents during economically challenging times. Critics of the amendment might argue that this tax increase could disproportionately affect lower-income households and limit spending capacity in other essential areas. Furthermore, the bill's long-term commitment to a new tax rate could raise questions about fiscal responsibility and sustainability in funding such initiatives. On the other hand, supporters contend that the long-term view on funding for housing stability is essential amid rising housing costs and a growing crisis of homelessness in the state.