State Spending Disparities Are Decades Old. Why Hasn’t The Easy Solution Been Activated?

Jul 21, 2020

North Carolina taxpayers channel billions of dollars into state agencies every year — agencies that, in turn, spend that money with private businesses in the state for anything from building construction to office supplies. But not every business benefits from the state dollars. 

Historically underutilized businesses — businesses that are at least 51% owned by a person in a racial minority, a socially and economically disadvantaged person, a woman or a person with a disability — have been left out of state spending for two decades. A 1999 executive order signed by then-Gov. Jim Hunt stated that the state should spend at least 10% of its money with these businesses, known as HUBs. But in 2019, HUBs only accounted for 5.2% of the state’s spending on goods and services.

The state has met its 10% goal in the construction spending category because of legislation that mandates the goal. No such mandate exists for the goods and services sector, and state officials have wavered on passing one even as spending leaves HUBs behind.

Host Anita Rao talks with Seth Gulledge, staff writer for the Triangle Business Journal, about his analysis of state spending and why minority-owned businesses have missed out on billions of dollars.