JOHNSTON — The Town Council is rescinding the tax benefits it gave two large auto dealerships, citing the town’s unresolved deficit and promising to reconsider the tax breaks once the town is on the path to recovery.

The council’s 180-degree turn on the tax treaties follows pressure last month from state Auditor General Ernest A. Almonte and a more recent request from the town’s incoming mayor, Joseph M. Polisena.

Both officials say the town needs a better grasp of its financial position – and an understanding of the amount of tax revenue in play – before it doles out tax benefits.

“There’s no more free rides,” Polisena said yesterday, clearly pleased that the council had acted on his recommendation.

“This helps me,” he said. “It proves to me that we’re going to have a great working relationship with the council.”

But Michael Grieco, owner of Metro Honda, had a problem with the council’s action Tuesday night.

“I’m a good asset to the town,” Grieco said. “I have nice properties. The treaty was brought up for the second time. This council passed it five to zero. Now you’re telling me that because this town is in financial disorder it shouldn’t be honored. It’s just not fair.”

“How do you give somebody a treaty and then take it away?” asked Grieco, who sells Hondas at a massive new dealership on Hartford Avenue near Route 295.

The legal answer to the dealer’s question has to do with the council’s ability to reconsider any of its votes within 30 days of taking them.

The council had ratified the tax treaties with Metro Honda, and Chris S. Hurd’s Hummer dealership across the street, on Sept. 18.

Last month, upon an inquiry from Almonte, officials initiated a process to rethink the vote.

The second time around, Councilman Ernest F. Pitochelli had no intention of supporting the measure.

At Tuesday night’s meeting, he accused Grieco of failing to pay taxes on time and suddenly paying the outstanding bills once the controversial tax breaks came into the spotlight.

Grieco simply asserted that all of his taxes were paid.

The council voted 4 to 1 in favor of withdrawing the earlier ratification and taking up the issue once again after officials have a plan for addressing the deficit. The deficit is estimated at $6.7 million to $10 million.

Councilman-elect Joseph A. Wells, who says he voted against the tax treaties when he was on the council in 2004, wanted to know whether he would have to recuse himself from any vote on the tax treaties that takes place in January. The answer was no.

Pitochelli said that withdrawing the ratification and then delaying a decision on it would be the easiest way.

Councilman William F. Santilli, who will leave the panel in January, voted against both treaty withdrawals.