San Gabriel's $11.9-million budget, up $400,000 over last year's, was narrowly approved by the City Council last week despite a $145,000 deficit.
City officials said they will cover the deficit by transferring money from the city's reserve fund. One firefighter, two public works employees and one Parks and Recreation employee will be laid off, and three police positions will be left vacant.
The budget passed on a 3-2 vote, with Mayor Sabino M. Cici and Councilman James Castaneda voting no.
"Personally, I think it's a bad idea to start the year already with a deficit," Castaneda said. "If the economy doesn't turn around, we may find ourselves even further in the hole."