As Cranston and municipalities across Rhode Island continue to await adoption of a state budget for the fiscal year that began July 1, the city had decided to move forward with the issuing of car tax bills.

“After the announcement the General Assembly was punting on the budget, we just decided like many other cities and towns that we can’t wait any longer,” Mayor Allan Fung said last week.

Calling the continued uncertainty from the State House “utterly frustrating,” he also said the city is exploring legal action over the withholding of some expected state aid.

Car tax bills are due to arrive in mailboxes at the end of this month or in early October, the mayor said. They will be divided into three payments – with due dates of Oct. 15, Jan. 15 and April 15 – based on continued ambiguity over whether the car tax phase-out at the state level will be fully funded by the state. Online payment is also available, and the bills should be available to view and pay via the city’s website, cranstonri.gov, before they arrive in mailboxes.

Fung said the car tax bills will reflect the higher exemption of $4,000 for fiscal year 2021, as laid out in the state law establishing the six-year phase-out. In the event the Assembly does not fully fund the planned phase-out amount for the current year, however, the mayor said his successor is “probably going to have to issue a supplemental [car] tax bill” sometime in 2021.

Fung said constituents have increasingly been inquiring about when the car tax bills would be issued. The city held off after the start of the fiscal year in hopes of action on the state budget, but the recent announcement by legislative leaders and Gov. Gina Raimondo that the budget would wait until after November’s election led to the decision to issue the bills now.

“That’s all anyone is asking me, because they want to know when [car tax bills are] coming … I was hoping to avoid all this,” the mayor said.

The lack of clarity on the state’s budget picture has created other issues for Cranston. Fung said the city is still “holding our own” in terms of cash flow, “but if this keeps going, it’s going to be challenging to get out heads above water.” He noted that with schools back in session, the city is now making payments to the district to fund its share of the school budget – just the latest in a series of developments that have strained municipal coffers.

In August, Fung and the League of Cities and Towns warned of a “COVID Trifecta” that has affected Cranston and other communities as Rhode Island continues to navigate the fiscal effects of the pandemic. That includes lower-than-anticipated car tax reimbursement and payment in lieu of taxes, or PILOT, funding – in all, roughly $6 million less than expected as the fiscal year began.

Also of concern to Fung and other municipal leaders is Raimondo’s plan to reduce funding for the state’s Distressed Communities Relief Program by half. The $12.4 million program is designed to assist communities with high tax burdens relative to the wealth of residents.

While Rhode Island remains without an approved budget, the state has been distributing the Distressed Communities aid at the level proposed by Raimondo. That equates to a $1.2 million hit for Cranston, according to Fung.

“They’re picking and choosing and ignoring the law,” the mayor said.

Fung said legal action against the state is being considered over the PILOT funding and Distressed Communities aid. The city has retained Angel Taveras, the former mayor of Providence, as its attorney in the matter.

“He’s doing all the research, and I’ve instructed him to compile a complaint,” the mayor said.

Fung’s administration has also proposed an ordinance before the City Council seeking authority to refinance some municipal bonds. The measure, which the mayor said would provide for roughly $700,000 in savings, received the backing of the council’s Finance Committee last week.

“We’re trying to take advantage of the market and the rates being where they are,” he said.