A looming deficit has made budget cuts — including elimination of the Family Theatre series and a reduction in staff — necessary to keep the venerable Prince Street theater running.

Theater officials blame dwindling corporate sponsorships and falling box office revenues for the deficit, which could total $380,000 by the end of the fiscal year in June.

"Unfortunately, we had to cut into the bone to avoid such a significant deficit," managing director Aaron Young said. "We try to be nimble. You have to be when you're a nonprofit. The changes we're doing are painful, but not unusual for us. They're the pains of a nonprofit."

Immediate steps include laying off four full-time employees from the Fulton's 30-person staff.

Layoffs include an administrative assistant, a box office associate, a carpenter and a sound-and-lighting supervisor. Also, all salaried staff will lose a week's pay this year.

"We knew we had to trim our expenses to account for the decrease in income," Young said. "Our biggest expenditure is personnel."

While the mainstage season will continue as scheduled, there will be additional cuts in costuming, sets, cast and orchestra size.

The three remaining shows in the Family Theatre series have been canceled and the touring production, which presents shows in area schools, has been eliminated for this year.

A revised budget will cut $288,000 in expenses through June, from an annual budget of about $3.8 million.

Young said subscription sales are at an all-time high for the theater, but single-ticket sales have dropped, resulting in revenues 18 percent below budget.

Single ticket sales can make up about 65 percent of revenues.

"We've lost a couple bank sponsors this season, and corporate income is about 18 percent down," Young said.

Not that corporate donations have completely disappeared. PNC Bank, which sponsored the Fulton's most recent show, "42nd Street," has no plans to cut back its giving next year.

"We have a great partnership with the Fulton," said PNC's Rob Rutz, vice president and director of client and community relations for central Pennsylvania. "We have no plans to reduce our level of support. And we have been pleased with the Fulton's openness and transparency (about their budget problems)."

Young said he began seeing real problems this fall, as ticket sales fell just as the national economic crisis was making headlines.

News at a recent national theater conference was gloomy, he said. Theaters across the country have been closing and cutting way back, and economists told the group not to expect ticket sales or corporate support to get better until at least 2010.

Young said the situation is bad, but not dire.

"The good thing is this community embraces the arts," he said. "We live in a community that gets it."

Budgetary woes will allow the theater to reassess some of its programs and make them more effective.

"We are going to be able to ride the storm," said trustee president Harvey Owen.

"We are heartbroken that we had to let people go and cut programs. We are absolutely committed to the Family Theatre series. But by tightening our belts and redefining the model of how we're going to run the theater, really good things will come out of it. We are going to refocus on our mission."

E-mail: tknapp@lnpnews.com