"Remember, we've got a $6.6 billion budget and the deficit is in a $380 million range. That's absolutely manageable," Newsom said.
Last year's deficit was bigger, approaching $500 million and the city managed to avoid any police or fire layoffs. Newsom says he and other city leaders have a proven track record in balancing tough budgets, and he will leave detailed options for the incoming interim mayor.
Some city workers are nervous nonetheless. Some employees didn't want to go on-camera, but said they always worry when there's a deficit. On the other hand, firefighters union president Tom O'Connor echoes Newsom's confidence.
"It should put us on edge, but we've been through this so many times before and we are ready to deal with this. I mean it is every year, it's doom and gloom, and every year we find a way to fix it. So we will find a way. I am optimistic that we will do it," he said.
When asked how many consecutive deficits it takes before they run out of creative solutions, Supervisor Bevan Dufty said he hopes the economy turns around before they have to answer that question. He points out, even though there were no layoffs last year, city workers still felt the pain of balancing the budget.
"City employees are over a two-year period of giving back $250 million, so they have been an important part of our solution," he said.
Newsom has just more than a month left to come up with ideas to leave his successor.