Senate committee advances constitutional amendment to dedicate sales tax revenue for housing

A Senate committee on Tuesday voted to advance a constitutional amendment that would dedicate a new portion of the state sales tax to long‑term housing funding.

Senate File 26-21, introduced by Senator Muhammad, would add a 0.375 percentage point statewide sales tax earmarked to three accounts — a Homeownership Opportunity Fund, a Rental Opportunity Fund and a Household/Community Stability Fund — that supporters say would produce an estimated $400 million a year for housing programs. "This is transformational — predictable funding that will make it possible to plan our way out of this crisis," Senator Muhammad said during his introduction.

Supporters, including nonprofit developers, faith groups and homelessness service providers, told the committee that sustained revenue would allow agencies and developers to commit to multi‑year projects, expand vouchers and increase supportive housing. Ben Anderson of Interfaith Housing said the plan could "create 8,300 new vouchers, stabilizing over 25,000 low‑income people," if phased as envisioned.

Opponents and some committee members raised concerns about fairness, geographic distribution and interactions with existing local sales taxes. Senator Housley offered an amendment to automatically repeal a 0.25% metro‑area housing sales tax if the statewide tax takes effect; that amendment failed on a roll call. Committee members also asked for clearer fiscal estimates, distribution mechanics and whether prevailing‑wage or other regulatory requirements could reduce rural contractor participation.

After extended debate on structure and oversight, the committee voted 6–5 to recommend SF 26-21 to pass and be referred to the Committee on Health and Human Services. The clerk recorded six ayes and five nays. The measure, if ultimately passed by the Legislature, would go to voters as a constitutional amendment.