SAN JOSE (KCBS) -- The California Attorney General thinks a plan by Mayor Chuck Reed to lower pensions costs in San Jose by declaring a fiscal state of emergency may be on shaky legal footing.

The office of Attorney General Kamala Harris said that the mayor's plan for a ballot measure to rein in pension cost raises serious legal concerns. Harris' senior counsel wrote a letter to lawmakers saying that "Financial problems faced by government must be resolved lawfully."

At issue is whether the city can declare a fiscal state of emergency to change benefits for current city employees.

KCBS' Matt Bigler Reports:

Reed defended his plan.

"We're acting under our powers of the city, under the Constitution," he said.

The San Jose City Council is faced with closing a $115 million budget deficit.

Reed has warned that drastic action was needed, given San Jose's ongoing budget gaps.

City officials have postponed discussion about the emergency declaration until the fall.

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)