Bill Cassidy, a Republican, represents Louisiana in the U.S. Senate.

As Congress drafts the next round of covid-19 spending, lawmakers are debating whether to give states money. We should. Without such funding, cities and municipalities will be forced to lay off workers and may therefore be unable to provide basic services to keep small- and medium-size businesses running.

Federal health officials made a wise decision to get the word out about social distancing and not gathering in crowds. People heeded this warning. The U.S. curve has flattened, and lives have been saved. But the collateral damage of closing down businesses has been lost tax revenue for states and cities.

As an example, the New Orleans Jazz and Heritage Festival would normally be in full swing this time of year, with hundreds of thousands of tourists enjoying beautiful Louisiana weather, cuisine and music. The new Louis Armstrong New Orleans International Airport would be collecting passenger fees; New Orleans and surrounding municipalities would be collecting sales tax receipts and hotel bed taxes. This is all gone. The tax revenue necessary to pay for police, fire, sanitation and airport ground crews is not there. Once these workers are laid off, there is no one to provide essential services to support employers and homeowners. The economy stops.

Congress and the American people made an enormous investment in getting our businesses back to work in the last stimulus package. In the next few weeks and months, states and municipalities will have to deal with revenue loss. Bank of America published a report that found state bankruptcy would crater the $3.8 trillion municipal bond market. Many states, including Louisiana, have to balance their budget every year. Some states are already acknowledging the shortfall and the pain it will cause. They all will soon.

If we do not provide stability for states, we risk wasting all the money spent to save small businesses. These small business need basic government services. Who will eat in a restaurant if garbage and rats are out front because a city has laid off sanitation workers?

Sen. Robert Menendez (D-N.J.) and I crafted the Smart Act (State and Municipal Aid for Recovery and Transition) to deliver critical, federal resources to the states and communities on the front lines of the covid-19 fight. The bill, which we will formally introduce when the Senate reconvenes Monday, would create a $500 billion fund to plug revenue losses and target additional funding toward coronavirus hot zones to combat the pandemic head-on.

Specifically, the legislation would deliver funding to all state and local governments, U.S. territories and the District of Columbia in three equal tranches based on a new formula that takes into consideration areas of the country with the greatest need. One-third is based on population size, another on the number of covid-19 cases and the last on revenue losses relative to pre-covid-19 projections to target the urgent economic challenge.

To be sure, there must be guardrails on how the money can be used. States cannot use it to make up for years of mismanagement of pension funds, bonuses for government employees or a wish list of unfunded projects.

We can and will get through this pandemic. Our country and its residents will be stronger because of it. But timidity and half measures will not restart our economy. Only by passing common-sense solutions such as the Smart Act can we begin to see the daylight.

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