NORTH ATTLEBORO - The town's revenue may fall $1 million short of meeting its current budget obligations, meaning the community may be faced with making some tough cuts midway through the fiscal year.

Town Administrator Mark Fisher recently completed a budget analysis by comparing the town's revenue collections for the first quarter of this fiscal year with the last fiscal year.

If the trend continues, he said town departments will have to make significant cuts during a January special town meeting to make up $1 million in lost revenue.

"The downturn in the economy is having a pretty hard effect on local receipts in town," Fisher said. "No one foresaw the economic collapse we've got now when the budget was constructed."

While collections for property and personal property tax appear to be stable, collections for motor vehicle excise tax and other fees are down, as is the town's investment income due to a drop in the interest rate. Fisher said motor vehicle excise tax collections are down statewide by about 20 percent, while North Attleboro's are projected to be down about 16 percent.

Although the town has a $71 million budget, about $20 million of that represents fixed expenses that cannot be cut. Fisher said that means departmental budgets may be faced with a 2 percent cut.

The school department's share would be about $680,000, he said.

Some departments have already cut more than 2 percent from their budgets by participating in a voluntary hiring freeze and leaving vacant positions unfilled.

There is some good news, however. Fisher said gasoline prices have dropped low enough to help make up for some of the shortfall, provided prices do not shoot back up again.

On Nov. 6, selectmen will meet with the town's financial team to begin discussing how to close that $1 million gap. Both budget cuts and layoffs may be considered, as well as dipping into the town's rainy day fund, known as the stabilization account, which currently stands at $2.7 million.

However, Fisher said the stabilization money may be needed later if the state decides to cut local aid.

"If we get into the spring and the state decides to cut their aid and we're not aware of it until March, we'll only have three months to make those cuts. We'll need the stabilization fund for that," he said.