Newsom does not want new taxes, but supervisors may recommend them to offset cuts. He gave his address at an art gallery on Market Street because he says it represents the city's commitment to economic development.
Newsom's proposed budget closes a $483 million gap.
He outlined some ways that he has been improving government efficiencies, such as a $1.6 million reduction in cell phone costs, labor unions that made nearly $62 million in wage concessions and an $18 million reduction in overtime pay. It's also a budget with no new taxes.
"About $227 million in new revenue without general taxes, and by being creative and leveraging resources," Newsom said.
The doomsday scenario of scores of city worker layoffs has been reduced to 350 and Newsom said he'll be able to invest $1.5 billion in public safety -- including the scandal plagued crime lab.
"Eight additional new staff for the public defender and district attorney, so they can make sure they are doing everything to update that crime lab," he said.
Newsom said his budget preserves the safety net for the city's most vulnerable, but ABC7 was told there are still programs facing elimination or crippling cuts like for example, the San Francisco Department of Public Health.
"We'll be losing a lot of our outpatient substance treatment. We wanted to try to preserve the residential systems," San Francisco Department of Public Health director Dr. Mitch Katz said.
"I'm ready to change because I got tired of trying to kill myself," recovering addict Tatiana said.
The 27-year-old recovering crack addict is in a residential treatment program on Treasure Island. It's run by the Haight Ashbury Free Clinic with city money and Newsom's budget is not good news here.
The chair of the Supervisor's Budget Committee said he and his colleagues are examining tax measures that could offset the devastating cuts. Those include a temporary raise in the hotel tax, a new business tax and a hike in the real estate transfer fee.
"We have certain goals we want to meet, and that is protecting San Francisco's most vulnerable people," San Francisco Supervisor John Avalos said.
The board has until July 30 to complete that task and between now and then expect lots of hearings, lots of debate coming from City Hall.