Covid-19’s New Normal: What’s Next & The Future For Local Government?
In Texas, many of us are headed back to work in offices that have been empty. What is next? What does the future hold? Can you envision a post-pandemic existence?
In Texas it appears social distancing has worked, but it is impossible to know since our testing levels are reportedly low. You can check for yourself on the Texas Department of State Health Services website here. According to the State, about a half-million Texans have been tested out of the nearly 29 million that live here per the census bureau. If you do the math that is less than 2%.
What does this mean? Are there more infected Texans out there than we know? Most of us have recovered from the initial fear of the unknown that prevailed in March when we were ordered to stay at home. Now we look to the future and will have to learn to adapt to a new reality until there is a cure for Covid-19, and likely forever.
Both the private and the public sector will need to acclimate. Local governments will likely continue to grapple with employment issues, revenues and budgetary issues, real estate development, keeping the public safe and the infrastructure sound, and just staying healthy. How will the changes impact city services?
The same struggles we all face are faced by employees that work for local government. If children and college students continue remote or distance learning for longer than anticipated, the workforce that runs local governments will have to adapt. What about our municipal public works, roads, law enforcement? Social distancing likely will continue as will the inevitable reduction in consumer spending.
As a result, workers’ wages will continue on the downturn as sales and income tax revenues will continue to plummet. Tax revenues will continue to decline at the state level and therefore will slow to a trickle for cities. These decreases likely will occur gradually, since it is difficult for state and local governments to make quick adjustments to spending: Contracts for the current fiscal year have already been written, and budget authority has already been granted to agencies as municipal budgets in Texas have been in place since August 2019. But unlike the federal government, states and local governments can’t compensate for lower tax revenues with increased borrowing — they must make up for them with some combination of lower spending, higher tax rates, or fees.
This impacts more than a few. State and local governments are significant players in the U.S economy. The public sector employs 20.2 million people in the US, approximately 14.5 percent of the workforce. Public sector employment is generally divided into three categories: federal, state and local government. The largest division of US public sector employment is local government, comprising 63.5 percent of public sector employment. State government makes up approximately 23.2 percent and federal non-postal workers 8.8 percent, according to the U.S. Bureau of Labor Statistics.
Municipalities just like the private business sector will need to rethink, adjust, and alter operations and business models. We are in a world of minimized human contact and this will not change; therefore, the rise of a contact-free economy in sectors like digital commerce, telemedicine, and automation. E-commerce is here to stay, residents and businesses in cities across Texas will drive the need for cities to improve their online presence and computer systems enabling online city business, from taking care of utility bills, permits, tickets in municipal court, or civic involvement and attendance at commission and city council meetings. As for automation, the robots were coming well before COVID-19 and I wrote a blog about this in 2018. Automated buses drive themselves, meals and purchases are delivered by robots, self-driving cars, robots writing parking tickets. Back to my initial questions can you imagine our world post pandemic?
Please do not rely on this article as legal advice. We can tell you what the law is, but until we know the facts of your given situation, we cannot provide legal guidance. This website is for informational purposes and not for the purposes of providing legal advice. Information about our municipal law practice can be found here.