Attorneys for the city and for the police and fire unions questioned Rawlings-Blake for more than three hours. A lawyer representing the unions drew sharp remarks from the mayor when he suggested that the city could have raised taxes or cut services to fund the pension.
The Fraternal Order of Police and the firefighters union contend that the administration's plan, which delayed retirement for some and abolished a fluctuating cost-of-living increase, among other changes, violates their contracts with the city. The filed suit in U.S. District Court in Baltimore in 2010 seeking to have the changes overturned.
Judge Marvin J. Garbis has ruled that some portion of the unions' claims could not be litigated in federal court but left open the possibility that they could be heard in state court.
Testimony is expected to wrap up Friday, and Garbis is expected to issue a written opinion in coming weeks.
The case hinges on the question of whether the abolition of the variable benefit, a cost-of-living increase based on stock market performance, was reasonable, necessary and for the public good.
Under the new plan, retirees under age 55 receive no cost-of-living increase. Those between ages 55 and 65 receive a 1 percent annual increase and those over age 65 receive a 2 percent boost.
Ken Driscoll, a 47-year-old retired police detective, watched the proceedings from his wheelchair in the back of the courtroom. Driscoll, who said he has been using a wheelchair since breaking his back while chasing a suspect, said that under the plan, he will not receive an increase in his benefits for eight more years.
Rawlings-Blake said that delaying changes to the pension plan could have caused the city's credit rating to fall. "I didn't have another alternative," she said.
Prompted by the city's attorney, James P. Ulwick of Kramon & Graham, Rawlings-Blake recounted the turbulent months after she was elevated to the mayor's office following the resignation of Sheila Dixon. Rawlings-Blake said that overhauling the pension plan saved the city $65 million in the fiscal year that began July 1, 2010, a year when the city faced a $120 million projected shortfall.
The mayor scoffed at the suggestion of a Georgia State University public policy professor, who testified earlier in the week that the city could have raised property taxes to fill the gap.
Dismissing the professor's suggestion as "ludicrous," Rawlings-Blake said, "It makes it very clear to me why there are no professors who are mayors of major cities."