Stunned by Governor Carcieri’s proposal to cut almost $13 million in municipal aid to help close a massive budget gap, city and town leaders say the plan couldn’t have come at a worse time.

The governor has said he has no choice but to reduce spending at all levels of government, local communities included.

But the proposed cuts — a combined reduction of revenue-sharing money and compensation for lowering local car taxes — come more than halfway through the fiscal year, when many cities and towns have already spent or otherwise allocated the money.

Worse than finding out this late in the fiscal year that they may lose much-needed non-school state aid, local leaders say, is that they were given no warning. Many of them learned of the plan through the media.

Johnston Mayor Joseph M. Polisena said his first inkling of Carcieri’s proposal came when he picked up the newspaper Friday morning.

“I had to read it twice because I could not believe what I was reading,” he said later.

“I understand this is a surprise,” Carcieri said in announcing his plans Thursday, “but with the cuts we’re making at a state level … then frankly [local communities] need to look at doing the same.”

He cited recent-year operating surpluses posted in most communities as part of why he believes they are in a position to absorb the aid cuts, adding that he doesn’t “have a lot of sympathy” for cities and towns.

But Polisena and others said they were stunned to see such a drastic proposal just a day after Carcieri unveiled a legislative package aimed at bringing “property tax relief” to Rhode Island. To hear that and then read of the proposed cuts, Polisena said, was “property tax disbelief.”

Some local leaders were less diplomatic. East Providence City Manager Richard Brown compared Carcieri’s fiscal plan to “rearranging the deck chairs on the Titanic.” Cranston’s Mayor Michael Napolitano said he has no choice but to start considering layoffs and city furlough days. Dan Beardsley, executive director of the Rhode Island League of Cities and Towns, said the governor’s failure to at least warn mayors and town managers that he intended to slash their aid was “disappointing at a minimum.”

Part one of the municipal aid plan calls for eliminating about 15.5 percent of each community’s share of the state’s general revenue, for a total of $10 million. Since the revenue-sharing program was launched decades ago, cities and towns have come to depend on the money and routinely include it in their annual budgets.

But Peder Schaefer, chief budget analyst for the state’s Office of Municipal Affairs, said the reality is simple if frustrating: in tough fiscal times like this one, there is not as much revenue to go around.

Part two of the plan would cut by $2.7 million the amount the state gives communities as reimbursement for reducing their local car taxes.

Currently, Rhode Island reimburses its cities and towns 100 percent of the taxes they would have collected were the state exemptions never enacted. But since communities rarely collect 100 percent of their motor vehicle excise taxes, Schaefer said the governor felt it fair to cut that reimbursement rate to 98 percent.

The municipal aid cuts are just one piece of Carcieri’s deficit avoidance plan. The proposal would force state employees to take several unpaid days off and eliminates some immigrant children from the state health care rolls to help close a $151-million budget hole over the next six months and prepare for a shortfall projected as high as $450 million for the year that begins July 1. The entire plan, including the aid reductions, will require approval from the General Assembly.

Thus far, legislative leaders have been hesitant to weigh in on the governor’s plan, though Sen. Paul E. Moura, D-East Providence, said forcing the local communities to shoulder the state’s burden was not the answer.

If the plan is approved, larger communities, including Cranston, Warwick and Pawtucket, will need to cut more than $1 million out of their budget by the end of the fiscal year in June. But no city would be more affected than Providence, which could lose close to $3 million in state aid.

Providence Mayor David N. Cicilline said cities and towns understand that this is a difficult budget year and are prepared to be “part of the solution.”

Just not this solution.

“This proposal to shift costs from the state back down to the 39 cities and towns, to take what was essentially a state budget crisis and turn it into a local budget crisis, to me is not an answer,” Cicilline said in an interview. “It may close the budget gap in the short term, but it will increase the likelihood that we are going to have greater challenges in the future.”

This is not the first time a governor has proposed cutting state aid in midyear. In 1989, then-Gov. Edward D. DiPrete proposed an $11.2-million cut. Communities howled. Mayors said they had no choice but to raise taxes.

This time around, the sting is especially strong given that cities and towns are grappling with a law passed last year that limits the amount of property taxes they can levy each year to pay for municipal services. With that cap scheduled to fall even further in years to come, many communities were already stretched thin. Add to that the likelihood that the General Assembly may freeze state education aid this year and the picture grows darker.

Most mayors and town managers interviewed Friday said they hadn’t a clue how they’d begin to find cuts this late in the year. Those who have surpluses said they worried what dipping too deeply into them would do to their community’s bond ratings. Just this week Pawtucket saw its rating drop in part for that reason.

Cicilline said he has asked his staff to begin looking at what the $2.8-million cut would do to city services.

In Middletown, interim Town Manager Shawn J. Brown said he’ll spend his holiday tomorrow crunching numbers to figure out how the town can absorb the governor’s proposed cuts.

In many cases, Beardsley said, he’s seeing frustration from local leaders who don’t understand why no one picked up the phone to warn them of what was coming.

“The governor said he is unsympathetic to the plight of cities and towns. Well if that’s the case, then I question cities’ and towns’ sensitivity to the state’s deficit that we didn’t create,” Beardsley said.

With reports from Journal Staff Writers Steve Peoples, Alisha A. Pina, Mark Reynolds and Meaghan Wims

cneedham@projo.com