SAN MARCOS -- Lower-than-expected sales and property tax revenues are forcing city officials to trim their budget by up to $4 million.

City finance director Liliane Serio said this week that city officials are compiling a list of cuts they can make immediately to offset the projected deficit.

There are no plans to eliminate or reduce city services, she said.

Instead, she said, the city will postpone buying new equipment -- including a new fire truck -- leave open vacant employee positions for now, and cut other "nonessential" expenses.

Serio and city spokeswoman Jenny Peterson attributed the drop in projected revenue to a spiraling economy that has affected cities, businesses and individuals across the country.

"It's under control. It's still manageable," Serio said. "And, hopefully, everything will turn around within the next few months."

San Marcos isn't the only North County city struggling with revenue shortages.

Escondido has been particularly hard hit.

Earlier this month, officials reported a projected $5.9 million budget deficit for the fiscal year that began July 1.

City officials are exploring the possibility of eliminating their economic development department, cutting city employees' pay by 5 percent, cutting half a dozen police officer positions, and reducing funding for fire department, libraries and recreation programs, to make ends meet.

In San Marcos, the City Council approved an annual budget of about $60.5 million in June.

The financial plan assumed the city would receive about $15.5 million in sales tax revenue and about $6.9 million in property tax revenue.

Those figures are about the same as they were last year, when the city's annual budget was about $62.1 million.

However, Serio said the city now expects to see its sales tax revenue go down by $2.1 million to $2.9 million and its property tax revenue to drop about $290,000 this year.

Those two revenue sources account for the biggest chunks of the deficit.

"We will have to cut down to cut costs, obviously," she said.

City Manager Paul Malone has said he generally tries to maintain a lean staff to keep costs down.

Unlike many other cities, San Marcos owns more than two dozen commercial, industrial and residential properties that are leased to developers and other tenants.

That entrepreneurial approach has provided a steady source of income that supplements the city's general fund.

So far, Peterson said, that lease revenue has been relatively unaffected by the economy.

"We're certainly not immune to what's happening with Escondido (and other cities)," she said. "But because we've not only been fiscally responsible but entrepreneurial as well, it's helping us in these times."

Contact staff writer Andrea Moss at (760) 739-6654 or amoss@nctimes.com.