North Carolina future without minority business support 

ISTOCK

North Carolina's new budget eliminated the Office of Historically Underutilized Businesses, which provided training for small businesses owned by people of color, women and veterans. It also eliminated procurement benchmarks for such businesses for state-owned projects.

When North Carolina’s 2026 Appropriations Act was signed in July, there was little media coverage. 

Even those most affected were caught off guard. 

“The elimination of the North Carolina Department of Administration’s Office of Historically Underutilized Businesses certainly came as a surprise to me,” said Nicole Outlaw, assistant director of Chapel Hill-based NCGrowth, founded in 2012 to created equitable economic opportunities for communities. Outlaw is also founder and president of the Bertie Business Network, an organization she launched in 2021 to help entrepreneurs access resources, network building and growth opportunities. 

“There were many areas of concern regarding the negotiations at the General Assembly, especially budget discussions,” Outlaw said, adding, “While I cannot speculate if it was a deliberate act to keep it under the radar, I believe those who were aware knew that the impact would raise significant concerns.” 

Why the “significant concerns?” To answer that question, understanding the full scope of the 2026 state budget is critical. 

The law eliminated the Office of Historically Underutilized Businesses effective immediately. 

HUBs are identified as small businesses in which at least 51% ownership is held by a woman, minority or service-disabled veteran. 

The HUBs office was part of the North Carolina Small Business Enterprise, which is under the Department of Administration, established in 1999 and signed into law by then-Gov. Jim Hunt. Executive Order 150, as it was known, included a statutory framework that mandated a percentage of all state agency procurements be obtained from certified HUBs. Qualifying businesses were granted certification after an application process. 

“The (HUB) office aided in supporting businesses to prepare by providing access to resources and building capacity regarding the certification and the procurement process,” Outlaw said.              “It afforded an opportunity to small businesses to provide goods and services to large anchor institutions.” 

Executive Order 150 also provided training and consultation to HUBs across the state. Along with the immediate closure of the HUB office, the new budget crafted by Republican lawmakers and signed into law by Gov. Josh Stein simultaneously repealed HUB-connected statutes, including mandatory good-faith effort requirements, and reporting certifications. In short, state agencies no longer must abide by statutes that guaranteed participation goals for women, minority or disabled small businesses.  

Current data shows that 99.6% of the state’s businesses are small businesses and make up about 45% of the private sector workforce.  Of those, nearly half are owned by women. Just under 16% are owned by Black people.    As of July, almost 6,500 small businesses held state HUB certification. 

“The business owners affected by the closing of this office represent a great number of new and existing businesses who were working to position themselves to obtain government contracts through HUB certification,” Outlaw said.

The NC DOA announced NCSBE is moving to the Division of Purchase and Contract but offered little else. NC DOA’s website only says, “more details coming soon.”

The NCSBE is described by the NC DOA as a “race- and gender-neutral program” that works to provide contracting opportunities to small businesses. That definition can have a misleading ring of equity and inclusion. Without consideration to race and gender, contracts will be awarded based on qualifiers such as business location, income and size, giving no consideration to the legacy of discrimination.

This is just one of the changes included in the state’s $34 billion package aimed at dismantling any provisions for diversity, equity and inclusion, a reflection of the larger national efforts to eliminate DEI, which proponents call unfair, illegal and unconstitutional. 

Earlier this summer, state House Speaker Destin Hall declared, “Taxpayer funded DEI is done in North Carolina.”

Close inspection of the 634-page budget plan supports Hall’s proclamation.  In addition to dissolving the HUB office and repealing its statues, the budget also eliminated the Office of Health Equity within the North Carolina Department of Health and Human Services, which worked for three decades to improve healthcare access for minorities and close disparities in healthcare services. 

The budget quashed a minority male mentoring program in the NC Community College Systems office. And while the budget allocates billions to the state prison system, including expansion efforts due to overcrowding, it nixed all state financial support to the Second Chance Initiative at Campbell University, a program that provides inmates with college education and career skills that can secure employment following release. 

For minority small business owners though, all hope is not lost.

While Outlaw encourages HUBs affected by the change to contact NCDOA directly for information about next steps. She also listed several other agencies that can offer ongoing guidance and support.                                                                                                            
The Small Business Technical Development Center, with locations across the state, offers workshops and free counseling for small business owners. 

Other options include the North Carolina Community College Small Business Center Network, and the nationally active Service Corps of Retired Executives.     

NCGrowth provides no-cost technical assistance to small businesses in rural and economically distressed communities.  

Outlaw emphasizes that the community at large can also make a difference. 

“[Everyone] can support historically underutilized businesses by intentionally patronizing them,” she said. “Shop small. Support local.”

Outlaw also says that spending power can go far when legislators fall short.

“Our communities have the consumer power to overcome adversity when we use the challenges we face as fuel to start a movement.” 

Comments