‘‘As long as I am mayor of Chicago, that is a burden I refuse to put on the backs of our taxpayers,’’ Emanuel told members of the House pension committee.
Bankruptcy is another option — though one officials are loathe to consider.
The state-appointed receiver in charge of Central Falls, R.I., filed for bankruptcy on behalf of the city in 2011. He went on to slash pensions for retirees by up to 55 percent. The retirees had refused to agree to take voluntary cuts, though the receiver warned that he was prepared to take unilateral action. He said the retirees’ choice was between a ‘‘haircut or a beheading.’’
‘‘They stuck it to us,’’ said Bruce Ogni, who retired as a captain from the Central Falls Police Department. His $41,000 pension was cut to $29,000. ‘‘We were told if we didn’t take the deal they might stop the pensions altogether. We took the hit for other people’s mistakes.’’
Stockton, Calif., filed for bankruptcy protection in June, becoming the largest American city to take such a drastic step. Officials cited the housing collapse, a struggling local economy and pensions. While pensions in Stockton won’t be impacted by the bankruptcy filing, health benefits for employees and retirees are on the table. The unfunded liability for those benefits stands at $417 million.
An August report by Moody’s Investors Service that predicted more bankruptcies and defaults in California as cities and towns reel from the collapse of the housing market, the downturn and rising pension costs.
Residents in San Jose voted this summer to cut the pension benefits for city workers. San Diego residents approved similar changes in June, voting to change the way pensions are calculated and place all new hires — except police officers — into a 401(k)-style plan.
Jack Canning, a 62-year-old civil engineer for the city of San Diego, said pay cuts and freezes forced him to postpone retirement for two years until he turns 67.
Still, he considers himself lucky. Newer employees with inferior pension benefits resent veterans like him.
‘‘People say stuff to me like, ‘Why are we holding onto pension benefits that you guys have and we don't?'’’ he said.
Contributing to this report were Associated Press writers Sara Burnett in Chicago, Elliot Spagat in San Diego, Ben Nuckols in Washington, Christina Almeida in Atlanta, Marc Levy in Harrisburg, Amanda Lee Myers in Cincinnati and Kevin McGill in New Orleans.