Providence is one of the few municipal governments that has sought to roll back benefits already being paid to retirees or accrued by public workers, said Amy Monahan, a professor at the University of Minnesota Law School. In most cases lawmakers have sought to cut costs by increasing contributions for new workers or renegotiating current contracts, she said.
"Most people would be very hesitant to take action that would interfere with a collectively bargained agreement," Monahan said. "You typically preserve what has been earned."
Just as labor groups say they plan to sue the state of Rhode Island, the smallest in the U.S. with about 1.05 million residents, unions in Providence, the capital, said they will challenge the city of about 178,000. Doughty said that Taveras and the council are playing a dangerous game by counting savings from the overhaul to help balance its budget, because changing contracts already in force is illegal.
'Huge' Error
"It's a huge mistake," said Doughty, the firefighter union chief. "If they lose this in court, almost certainly they will end up in bankruptcy. They're playing a huge game of chicken."
The average city pensioner gets about $25,000 a year, Doughty said. Rhode Island's median household income averaged about $54,900 over five years through 2010.
The vote in Providence comes as the Legislature run by Democrats debates a proposal from Governor Lincoln Chafee that would authorize municipalities with poorly funded pension plans to suspend cost-of-living increases. If it becomes law, the measure would strengthen Providence's argument that it needed to overhaul its system, said Ortiz, the Taveras spokesman.