Make no mistake, the long-term future of Texas and the Houston area will be determined more by the economic crisis than by the coronavirus. The focus on protecting the health of residents by flattening the curve is the correct approach but now is also the time to look ahead to the recovery phase. Too many officials and pundits seem to assume the economy will simply return to normal once businesses are allowed to reopen and Texans are freed to go about their daily lives. That won’t happen easily.
This post is part of our “COVID-19 and Cities” series, which features experts’ views on the global pandemic and its impact on our lives.
While government officials and health care professionals battle the virus, now is the time for other experts to look ahead to the recovery and future economy of our state and region. COVID-19, the downturn in the oil and gas industry and almost certain global changes in the energy industry mean that officials can no longer rely upon the “Texas Miracle.” Future-oriented, difficult policy decisions will have to be made.
State, county and city leaders need to team-up
The first challenge is to get all levels of government to work as a team.
At the statewide level, Texas Comptroller Glenn Hegar recently issued a warning that state revenues will be down by “several billion dollars” from earlier projections. The loss of sales tax revenue due to the closure of restaurants, bars and other businesses is a harsh blow, but the simultaneous plummet in the price of oil has severely impacted state revenues and put thousands of Texans out of work. When the state Legislature meets next January, legislators will face a shortfall unseen in decades.
At the local level, counties and cities are bearing the brunt of up-front costs of fighting COVID-19. Losses in sales taxes and restrictions on future property tax revenues will hamstring the ability of cities and counties to provide minimal necessary services, much less return to pre-virus levels. Sure, the federal government has committed to reimburse most of the local expenses, but those dollars will not flow as quickly as needed and local governments have not shown the ability to deliver the federal funds to people in need. It is as if the federal dollars are poured into a funnel at the top of the system, but the spigot at the bottom is too narrow to flow to those in need. Just look at how many businesses and homeowners are still waiting for the help promised after the floods of Harvey.
In recent years, state officials have been broadly attacking local governments while ignoring the fact that cities and counties have unique needs. For example, Harris County is responsible for almost 2 million people living in the unincorporated part of the county. The unincorporated part of Dallas County has less than 10,000 residents. At the very least, we should demand that the state government stop attacking local governments and view them as partners moving forward. Cities and counties, the governments closest to the residents, must not be caught without the resources to address disasters. So-called “rainy day funds” must be available for prompt distribution in times of crisis. Clear lines of authority and communication must be established.
This is an opportunity to improve the lives of all Texans
The second challenge is to focus not just on businesses but on individual Texans.
The real need for a robust recovery will be in businesses of all sizes. But, the recovery of businesses will depend on the ability of their customers to come back and purchase products and services. So, individual households must be given real paths to economic security and hope for the future.
Officials at all levels will no doubt create task forces to talk about and make plans to restore the economy, but the goal must not be a return to the pre-COVID-19 environment. Now is the time to look at how Texas can be restructured to make its residents’ lives better. Too many Texans have been shown to be vulnerable due to lack of access to health care, inadequate diets or economic insecurity. The state’s approach to immunization policy is not based on science. Basic questions about who is incarcerated have been exposed during this time of crisis.
The Texas economy has to be diversified
The third challenge is to accelerate the diversification of our economy.
COVID-19, combined with the oil crisis, has been stressful. Maybe it is the slap in the face we Texans needed to make us look to the future. Texas has been economically strong because of the energy industry, primarily oil and gas. That industry will continue to be a foundation in a lower-carbon-producing world, as the oil and gas producers become more environmentally friendly and are joined by other energy producers such as biofuels and renewables. Our medical and health science stature is recognized worldwide. Innovation centers and entrepreneur development are poised to grow exponentially here. The public schools and the higher education community, joined by workforce training schools, will need to prepare Texas for this future. Nonprofit organizations, who themselves are suffering from diminished funding, will need to play an even bigger role in assisting those Texans who are lacking in resources and skills.
COVID-19 has killed many, shut down businesses, cost workers their jobs and changed society for now. The virus will be conquered. The economy will be slow to recover and lives will be scarred. If we make bold plans now that invest in Texans, we can chart a solid future that can withstand future crises.
Ed Emmett is a former Harris County judge and former state representative from Harris County. He is a senior fellow at the Kinder Institute for Urban Research and a professor in the practice at Rice University with a focus on public policy.
This commentary originally was published in the Houston Chronicle.