Enactment of this legislation modifies the local sales tax contribution to the Homeless Shelter Cities Mitigation Restricted Account by increasing both the percentage of certain sales tax revenues deducted and the maximum deduction cap. Impacts on state revenues will not begin until CY 2028, as calendar year deductions are calculated using data from the prior fiscal year. It is estimated that this bill will increase state sales tax revenue distributed to the Homeless Shelter Cities Mitigation Restricted Account by approximately $775,000 in FY 2028 and $5,754,000 in FY 2029. Starting in FY 2027, this bill would transfer any cigarette tax revenue exceeding $48.9 million into the Homeless Services Restricted Account. Because cigarette tax revenues for FY 2027 are not projected to exceed this threshold, no revenues are expected to be transferred under current law.

Enactment of this legislation could cost the Tax Commission $3,900 one-time from the General Fund in FY 2026 for system updates and testing. Enactment of this legislation could also cost the Department of Government operations $900 one-time in FY 2026 and $1,900 ongoing beginning in FY 2027 from the General Fund to set up and maintain a new restricted account. The bill creates the new Homeless Services Restricted Account and new requirements for service provider advanced payments; costs for the Department of Workforce Services (DWS) to implement these provisions could be $108,200 annually from the General Fund. The bill also appropriates ($20,998,000) one-time in FY 2026 and $20,998,000 one-time in FY 2027 from the General Fund to pass through to shelters. Finally, enactment of this legislation could cost the Department of Health and Human Services $32,400 ongoing from the General Fund beginning in FY 2027 and $4,500 one-time in FY 2026 to support operations related to homelessness.