The COVID-19 shutdown has had a negative economic effect on many families in our area and across the nation.
And governments are feeling the pinch as well.
Texas is often cited as an economic miracle. The state's lower taxes and relaxed outlook on regulation has drawn businesses from other parts of the country and fostered a robust economic climate.
But with so many businesses closed or in limited operation, consumers haven't had as many places to spend — even with the recent federal stimulus money. That means state tax revenue has fallen and will continue to do so for a while.
Now, if this were Washington, D.C., the solution would be to borrow more money. But the Lone Star State has a better plan.
This week, Gov. Greg Abbott and Texas House Speaker Dennis Bonnen, R-District 25, put in motion a plan to cut spending by 5% at all state agencies. He asked each to identify where they can make the cuts by June 15.
"We are confident that Texas will get back to work and continue leading the nation in job growth, economic innovation, and business creation. However, it will take months until we know the true extent of the economic ramifications of COVID-19, and how combating this virus will impact state finances," the pair wrote in a letter to agencies.
"To prepare for this economic shock, we must take action today to ensure that the state can continue providing the essential government services that Texans expect," they added.
Abbott and Bonnen also took steps to ensure no money is taken from the state's coronavirus response, excluding the Division of Emergency Management, Department of State Health Services, Texas Workforce Commission, Texas Military Department and Texas Department of Public Safety from the cuts.
"As Texans recover from this pandemic, it is incumbent that state government continues to maintain mission critical services without placing a greater burden on taxpayers," Abbott and Bonnen wrote.
We agree. Confronting any shortfall now with spending cuts rather than burdening taxpayers now with higher rates or in the future with borrowing is sound governance.