How does Texas's research output affect its ability to pull in top professionals from elsewhere ?
The mid-west has amazing public STEM schools in UMich, Wisc, UIUC, Purdue....and yet their economic centers are in free fall. On the other hand, none of Texas's top cities had a top public school (Houston, Dallas, San Antonio) and they got by just fine. Austin's rise fairly recent. If anything, the sad state of local economies near massive flagship universities like UMass, Penn State, UFl, TA&MU shows that top-graduates clearly do not care about "sticking around" near their university, and instead just work at whatever the actual economic center is.
Waterloo is one of the top tech schools of the world thanks to a well run co-op program, and their professors have little to do with it. Top universities are amazing thanks to getting the best students and amazing undergrad teachers, who often tend to be PhD students or lecturers. Neither have tenure, so I'm not too worried about their ability to keep the momentum going.
Hell, I'm not even sure that the research output itself will drop. It's not like the total funding for universities went down. We might even see $$ go towards more competitive areas, and a further increase in productive output.