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The Montana town that turned its stimulus money down

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Posted at 4:23 PM, Aug 19, 2021
and last updated 2021-08-19 18:23:50-04

ISMAY — Tens of millions of dollars of COVID-19 relief money allocated by the federal government under the March American Rescue Plan Act has flowed to Montana towns and cities, funding intended to patch up pandemic-strained budgets and support water and sewer infrastructure investments.

One eastern Montana town, where the 2020 census tallied 17 residents, has responded with a polite no thank you, reports Montana Free Press.

“We don’t really need it for anything, so it might as well go to someone who can use it,” longtime Ismay Mayor Gene Nemitz said in an interview this week.

Ismay, the smallest incorporated municipality in the state, was slated to receive $4,853.35 from the local government relief program, which has allocated much larger sums to more populous cities: $15.9 million to Billings, population 117,000, for example, and $2.1 million to Miles City, which has about 8,400 residents. In all, Montana municipalities have been allocated $86.4 million.

The relief amounts specific to incorporated cities and towns were calculated by the U.S. Treasury based on population. Cities with 50,000-plus people are receiving money directly from the federal government, while payments to smaller towns and cities are being routed through state government. An initial round of payments went out in June, with a second round expected next year.

Montana counties also got their own relief allocations, totalling $208 million, as have tribes and the state government — the latter of which is putting hundreds of millions of dollars of its relief money toward a separate local government infrastructure grant program.

The relief funds come with a specific set of allowable uses. Government entities can spend the money on COVID-related public health work and efforts to address the pandemic’s economic impact, but can’t use the money to fund pension programs or tax cuts. Local governments can also patch up their budgets where revenues have declined as a result of the pandemic or invest the money in water, sewer or broadband internet projects.

Local governments can, for example, use their direct allocation to meet a local-matching-funds requirement for the state infrastructure grant program.

The challenge for Ismay, Nemitz said, is that its bare-bones town government doesn’t offer services that fit in those categories. There’s no municipal water or sewer system, he said, just a few gravel streets the town looks after.

“Really, we don’t have much other than a couple street lights that stay lit,” Nemitz said.

As a result, Ismay’s leaders have informed the state that it will turn down its allocation. An email exchange between the state Department of Administration and Ismay town clerk Barbara Simonsen in late July indicates the town will return its initial installment.

Ismay, located east of Miles City, consists of a grain silo, post office, church and community hall nestled alongside a few houses. It’s six miles from the nearest paved road, U.S. Highway 12, in a stretch of Montana so sparsely populated that small signs along the highway list the names of individual property owners.

Ismay is probably best known for the stint in the 1990s when its residents voted to rename the town Joe, Montana after the NFL quarterback — a publicity stunt instigated by a Kansas City radio station.

That episode ultimately produced a modest infusion of infrastructure funding that didn’t involve the U.S. Treasury. By selling T-shirts and other novelty items, locals were able to raise enough money to repair a fire truck and build the community hall, the Joe Montana Center, which does double duty as a fire station.

The Joe Montana Center is starting to show some external wear these days — the last “a” in Montana on its sign was missing when a reporter photographed it in late July. Nemitz, though, said that’s not a money issue, and that the community has enough to keep the center maintained in an account funded mostly by donations.

“Really we’re doing all right. We don’t need a lot,” he said. “So there’s no sense in taking money we don’t need.”