But different and arguably on-average cheaper costs.
Paper can rot if it's not kept climate-controlled, but not nearly as fast as bits stored to non-volatile media if the power goes out and there isn't a hot backup.
Government records aren't "text" though. They're documents, which need to be preserved with any margin notes, markings, signatures, etc. intact. So if you're storing government records, you're storing images.
Physical storage space definitely does have a cost, but so does software licensing, hardware maintenance contracts, etc. And a lot of government organizations have physical space in abundance, but IT resources, less so.
Paper can rot if it's not kept climate-controlled, but not nearly as fast as bits stored to non-volatile media if the power goes out and there isn't a hot backup.