2018 Fiscal Year State Budget, NC Budget and Tax Center

How to make a program irrelevant: The N.C. Office for Historically Underutilized Businesses

If you want a program which “advocate(s) actions which increase opportunities for historically underutilized businesses and promotes diversity and inclusion in state government procurement and contracting” to not do its job, you do it quietly.

The Historically Underutilized Business (HUB) Office was established by Executive Order 150 in an effort to remedy past and ongoing discrimination in the procurement and contracting markets in North Carolina. After being codified in 2001, the initiative aimed to 1) increase the amount of goods and services acquired by state agencies from HUB firms, 2) make progress towards eliminating barriers that reduce participation of HUB firms, 3) encourage purchasing officers and relevant personnel to identify and utilize HUB vendors and contractors, 4) educate HUB firms on doing business with the State of North Carolina and 5) provide resources for HUB firms.

Since its inception, the program has experienced very modest success but has been plagued with persistent inequity. A study commissioned by NCDOT in 2014 found ample evidence that race and gender remain barriers to the full and fair opportunity to participate in NCDOT’s contracts. NCDOT’s study employed a ratio measure to determine how HUB enterprises were utilized relative to white-male owned enterprises, where ratios below 80 percent indicate a disparity. For every 100 contracts awarded to white-male owned businesses, white women got 79.87 contracts, Black-owned businesses received 49.94 contracts, and Hispanic-owned businesses got 18.25 contracts. Read more

NC Budget and Tax Center

Eastern NC is suffering

As North Carolina’s unemployment rate continues to decline, today’s local labor market data reveal an alarming trend for Eastern North Carolina. There are 20 counties in this region with unemployment rates at least a full percentage point higher than the state average (4.3%).

While North Carolina, particularly urban counties, are experiencing a gradual recovery, rural and eastern North Carolina is facing a much different reality. There are nine counties in the East that presently have higher unemployment than before the Great Recession. In December of 2007 total unemployed in these counties registered 12,721 while in April of this year it stood at 13,069.

Wilson County, NC

The epicenter of North Carolina’s recovery seems to run along interstates 40 and 85 but it has bypassed the 95 corridor of our state. In the wake of Hurricane Matthew, a robust state and federal investment oriented towards employing local residents and contracting with local businesses could go a long way to driving improvements in Eastern NC and for the state as a whole.

Beyond leveraging targeted investments to address the damage of Hurricane Matthew, it is clear that the state’s unemployment insurance system is failing counties with higher unemployment rates than the state average by tying the number of weeks to the state unemployment rate and not reflecting local labor market realities.

Highlights from this month’s labor market data include:

Persistent Unemployment in Eastern NC: Unemployment rates in Wilson, Tyrrell, Nash, Hoke Sampson, Halifax, Martin, Wayne and Washington counties remain above pre-Recession levels. Wilson County, for example, has almost 15 percent more unemployed residents than in December 2007. After nearly eight years of recovery, more than 13,000 residents in these counties are without jobs.

Disappearing labor forces: Further, Sampson, Wilson, Robeson, Northampton, Halifax, Martin, Richmond, Hyde, Scotland, Chowan, Washington and Tyrrell counties have all lost 10 percent or more of their labor forces since 2007. In particular, Tyrrell, Washington, Chowan, and Scotland have lost 31, 26, 22 and 19 percent of their labor forces respectively since before the recession.

-Cities in Eastern NC face serious challenges: Cities in Eastern NC such as Fayetteville, Goldsboro, and Wilmington have seen their unemployment rate either rise or remain flat since 2007. Wilmington and Goldsboro have seen their unemployment rates rise to 6 and 8 percent respectively. The disparity with North Carolina’s larger cities is disheartening as Charlotte and Winston-Salem saw declines in unemployed people of 6 and 12 percent respectively.

NC Budget and Tax Center

North Carolina’s productivity is slowing, lagging behind much of the South

Last week, the Bureau of Economic Analysis released the latest data on economic growth measured by the production of goods and services for all 50 states.  North Carolina’s annual growth rate of 1.6 percent ranked the state 19th in the country.  This was below other Southeastern states (1.8 percent) and slightly above the national average (1.5 percent).

North Carolina’s economic performance on this measure is falling short of its potential even in comparison to the South. Neighboring states of South Carolina and Tennessee outperformed the Old North State, as did Georgia.

NC Budget and Tax Center, Trump Administration

Five major ways that the Trump budget would hurt rural North Carolina

Cameron, NC. Photo by Gerry Dincher.

If your budget is a reflection of your priorities, it’s clear that President Trump does not prioritize the well-being of rural North Carolina and connecting more people to opportunity.

1. The plan cuts 21% of USDA, which is critical to rural North Carolina.

Trump’s plan proposes a cut of more than 21 percent to the USDA—a $4.7 billion dollar reduction to its funding of various initiatives that support the development of rural America and the food systems that support our country. This would directly harm rural communities and agriculture across the heart of North Carolina. Moreover, Trump’s budget would decimate rural infrastructure, even as communities seek to remain attractive to business and residents, new and old.

2. Budget threatens rural development dollars that are key to thriving rural communities.

More than 3 million North Carolinians live in rural regions of the state. Since 2009, the Old North State received $12 billion dollars in rural development funding from the USDA. From these awards, North Carolina received 54,747 Single-Family Housing Loan Guarantees totaling $7.5 billion dollars, 62 Electric Direct Loans and Loans Guarantees ($1.5 billion dollars), 3,537 rental assistance cases ($500 million dollars) and 372 Community Facilities Direct Loans ($710 million dollars), to name just four programs. According to Trump’s budget, these programs would be threatened with cuts. The Transportation Investment Generating Economic Recovery is being completely eliminated, which represents 21 percent of grant dollars to rural and tribal communities. Read more