Minority business office & health equity office are abolished in NC’s new budget
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- NC’s state budget abolishes the Office for Historically Underutilized Businesses.
- The budget transfers the Office of Health Equity to another DHHS division.
- Budget removes minority business recruitment provisions and bans some participation goals.
North Carolina’s new state budget abolishes one office that supported minority-owned businesses and folds another focused on health disparities into a broader public health division.
The budget also repeals several state laws intended to increase opportunities for businesses owned by members of minority groups to win government contracts.
The budget abolishes the Office for Historically Underutilized Businesses, which connected businesses with state contracting opportunities. Businesses were eligible if they were owned by people who are Black, Hispanic, Asian American, American Indian, female, socially or economically disadvantaged, or disabled.
It also eliminates the standalone Office of Minority Health and Health Disparities by transferring its duties to DHHS’ Division of Public Health. The HUB Office was part of the Department of Administration, while the Office of Minority Health and Health Disparities was within DHHS.
Gov. Josh Stein, a Democrat, signed the bill passed by the Republican-controlled legislature. He told reporters during a budget signing ceremony Tuesday that the budget includes “programs that they have eliminated that have people doing that work, and those folks will lose their jobs.”
“Obviously, I care about those people, but I care more about the work they do,” Stein said Tuesday. “Our Office of Minority Health and Health Disparities — it is a fact that people of different races experience different health outcomes, and what we should be doing is doing everything we can to improve the health of all our people, and if you were blind to the fact that different health concerns impact different populations differently, you are going to miss out on opportunities to improve people’s quality of life. It’s just, it’s just wrong. There’s no other way to speak it.”
The News & Observer reached out Tuesday to the offices of Senate leader Phil Berger and House Speaker Destin Hall for comment on the closures. They did not respond.
Republicans, who control the General Assembly, have sought to eliminate programs and initiatives that consider race, sex and other characteristics in government and education.
In late June, Republicans in the state House, joined by one Democrat and one former Democrat who is now unaffiliated, voted to override several of Stein’s vetoes of bills targeting diversity, equity and inclusion initiatives. Broadly, the bills prohibit DEI initiatives in schools and state government.
All but one of the DEI bills had already been overridden by the Senate, allowing those measures to become law.
“The bills that are eliminating DEI in the state simply seek to take race and all of those things out of the decision-making process,” Hall told reporters after the overrides.
Office closed and minority contracting goals eliminated
The budget abolishes the Office for Historically Underutilized Businesses and says any advisory committees established by the secretary of the Department of Administration “to develop recommendations to improve the recruitment and utilization of minority businesses are hereby abolished.”
The budget also cuts several provisions in state law related to minority business recruitment. That includes a law that said that when the state — or a local government using state money on a project costing $100,000 or more — undertakes a government construction project, it should aim for at least 10% of the project’s dollar value to go to minority-owned businesses. It defined minority-owned businesses as those owned by people who are Black, Hispanic, Asian American, American Indian or women.
The budget also bans state and local governments from setting their own minority- or women-owned business participation goals for certain types of contracts.
Department of Administration Secretary Gabriel Esparza said in a written statement shared by the department that, “We are deeply disappointed by the elimination of the HUB Office and the support it has provided to North Carolina businesses.”
“For more than 25 years, the HUB program has been instrumental in increasing the number and types of businesses competing for government contracts across North Carolina. This cut means 10 current employees will lose their jobs, and we are working to help them find other opportunities. We hope to continue to work with many HUB businesses through the Small Business Enterprise program, which will be moving to DOA’s Division of Purchase and Contract,” said Esparza, who is the first Latino to head a cabinet department in the state’s history.
The Small Business Enterprise Program, which was housed within the HUB Office, is aimed at helping small businesses compete for state contracts.
Office of Minority Health and Health Disparities
The budget eliminates the standalone Office of Minority Health and Health Disparities by transferring all of its authority, functions, powers and duties to DHHS’ Division of Public Health.
The budget refers to the office as the Office of Health Equity, which DHHS said is the same office as the Office of Minority Health and Health Disparities. It says all of the office’s authority, functions, powers and duties are transferred to and consolidated within the Division of Public Health.
The budget also prohibits the creation of a separate entity to carry out those functions
According to its website, the office was established to identify and help reduce differences in health outcomes and access to care across North Carolina. It works with health care providers, community organizations and local leaders and publishes reports examining disparities related to factors such as race, ethnicity, geography and income. Those reports have informed state efforts to improve maternal health, expand access to care and address other gaps in health outcomes. For example, those reports have looked into ways to improve maternal health. Black women in North Carolina are about three times more likely than white women to die from pregnancy-related causes.
DHHS spokesperson Hannah Jones said in an email on behalf of the department that DHHS will work to implement the legislation “in a timely manner.”
“NCDHHS’ Office of Minority Health and Health Disparities has been in place for more than 35 years, and while it is disheartening to see the change in organizational structure, we are glad these valued colleagues will remain part of the Department under the Division of Public Health,” Jones wrote.
“Everyone in North Carolina deserves access to affordable and appropriate care, and the work of OMHHD helps close gaps and improve health outcomes across all communities,” Jones wrote.
This story was originally published July 8, 2026 at 3:38 PM with the headline "Minority business office & health equity office are abolished in NC’s new budget."
