Three months ago, the city faced a $229 million shortfall. Now, the controller says the city is another $4 million in the hole. As a result, Newsom has told a number of city agencies to curb spending immediately, with the freeze primarily affecting new services that were about to be funded. "Alleyway restoration and investments into street improvements that I am passionate about, we've just got to cut those," lamented Newsom. "As much as I want to do some different things, we can't do it. Some things we wanted to do on 311, we can't do it."

The biggest impact will likely be felt at San Francisco General Hospital, where Newsom is ordering a reduction of elective surgeries, the closure of popular homeless drop-in center, and shutdown of the worker's compensation clinic.

Newsom said it's only going to get worse. "This is nothing, compared to the decisions that need to be made with the actual budget."

It's not clear whether there will be any layoffs connected to this spending freeze.

KCBS' Barbara Taylor reports