The estimated budget gap "is the biggest single shortfall in our history, and it's going to test us," the mayor warned.
In remarks that veered from cheery optimism to harsh fiscal reality, the mayor said, "crisis is the mother of opportunity."
City Hall is preparing for possible layoffs, but Villaraigosa promised to continue hiring more police, a cornerstone of the 2005 campaign that put him in office. He conceded some of his far-reaching plans had fallen short - his proposal to take over city schools flopped - but added, "the only real progress comes in striving."
Among his proposals, the mayor wants to shift money into areas where gang violence poses the greatest risks, especially to children.