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Informational hearing: coalition proposes constitutional amendment to raise dedicated housing funding via 3/8-cent sales tax
Summary
Senator Mohammed and the Our Future Starts at Home coalition presented an informational proposal for a constitutional amendment to dedicate long-term revenue for housing. The plan would raise the sales tax by 3/8 of 1% to generate nearly $500 million annually for 25 years, allocating funds among homeownership, homelessness prevention, and rental
Senator Mohammed convened an informational hearing to present a coalition-backed proposal for a constitutional amendment that would establish dedicated, long-term state funding for housing across Minnesota.
Senator Mohammed framed the proposal as a way to move the state from short-term, unpredictable appropriations to stable revenue. “Without dedicated funding…we remain stuck in a cycle of emergency response rather than addressing the root causes of housing instability and homelessness,” she said. The amendment would increase the state sales tax by three-eighths of 1 percent and direct funding to three broad uses: homeownership supports, a community housing stability fund (rental assistance, shelter funding, legal aid), and a rental opportunity fund focused on new affordable rental housing and vouchers.
Nalima Sitati Munene (co-chair, Our Future Starts at Home Coalition) and Ben Helvick Anderson (Beacon Interfaith Housing Collaborative; co-chair) presented coalition goals and supporting evidence. The presenters said dedicated revenue of roughly $500 million a year for 25 years could support large-scale outcomes: an estimated 1,000 new single-family homes per year, 8,000 new rental vouchers, and about 667 new rental homes annually if implemented as proposed. The presenters proposed three oversight councils representing diverse geographic and lived-experience perspectives to advise the governor and legislature on allocations and priorities.
Multiple witnesses described how predictable funding would help developers and providers move multi-source financing packages forward. Leanne Littlewolf of the American Indian Community Housing Organization described emergency shelter and supportive housing programs serving Native communities in Duluth and said stable funding would support both development and services. Sue Fust, a child psychologist with Beacon Interfaith, testified on health and developmental harms associated with housing instability and urged predictable funding for vouchers and supportive housing. Other witnesses, including Miss Jackson and Chad Adams of Southwest Minnesota Housing Partnership, described personal and organizational experience with housing scarcity and preservation needs in Greater Minnesota.
Committee members asked about timing, process and whether the proposal would become a ballot question. Senator Mohammed said the presentation was informational and that statute language is in the reviser’s office; she said the next steps would include reviser jackets and consideration by the tax committee if introduced. Several senators voiced support for putting the question to voters. Senator Putnam framed the proposal as a democratic choice rather than a typical tax increase.
Ending: The committee received the coalition’s presentation and public testimony; the session was informational and no committee action was taken during the hearing. Sponsor and coalition members said they will pursue bill introduction and public engagement steps to bring a constitutional amendment before voters.
