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(Reuters) - Chicago Mayor Rahm Emanuel on Friday called for phasing in higher, state-mandated payments to city pension funds to avoid a shock to the city's budget and a big property tax hike.

The move, which would require state legislation, was part of a plan released by Emanuel's re-election campaign ahead of an April 7 runoff election against Cook County Commissioner Jesus "Chuy" Garcia, who also released his fiscal plan on Friday.

Under an Illinois law, Chicago's contributions to its police and fire pension funds will increase by about $550 million next year. Another state law allowing cost-saving pension cuts to shore up Chicago's municipal and laborers' retirement funds is at risk of being voided as unconstitutional in state court.

Still, the mayor's plan advocated measures that labor unions and others are challenging in court. These include slowing cost-of-living increases for pensions and gradually increasing workers' contributions to ease costs.

Emanuel also called for closing Illinois tax loopholes to gain money for the third-biggest U.S. city, along with obtaining state approval for a publicly owned casino.

Garcia's plan seeks cost savings through intergovernmental collaboration and creates a committee to examine revenue options. It does not address possible funding sources for Garcia's campaign pledges to hire 1,000 new police officers and to replace traffic ticket revenue generated by red-light cameras he wants removed.

With tonight's 125-94 loss to the Warriors, the Knicks are the first NBA eliminated from playoff contention.