NORWAY – With the expected loss of about $383,000 in income in the next fiscal year, the town faces some tough choices, Town Manager David Holt told selectmen Thursday night.

“At first glance what we may deal with is not going to be easy to do,” he said. It may mean delaying road repairs and cutting departments’ spending in 2009-10.

The largest loss is an estimated $200,000 from surplus, Holt said.

“The struggle is unique for us, because the last 15 years we have benefited from a very good surplus” that has been routinely set aside by town meeting voters for emergencies, road repairs and other issues. “We’re used to it being fairly routine. This year, I don’t think we’ll have much surplus,” he said.

While the surplus account usually runs about $150,000 to $300,000 a year, Holt said he became worried about relying on it last year when the town significantly drew on it and had to borrow from another account to pay for things usually paid for with surplus.

“That was an indication we took the surplus down below where we should have,” he said. “We don’t want it so low we have to borrow to get us through the year.”

The town also stands to lose about $48,000 in state revenue, the Maine Municipal Association has projected. A third dwindling revenue source is excise taxes paid on new car purchases. That deficit is expected to be about $60,000. The remaining $65,000 in revenue losses comes from other sources.

There is also a proposal to cut the excise tax, which would cause further reductions, Holt said.

Holt has asked all department heads to turn in budget proposals that do not take into account any cutbacks.

“Then I’ll probably come back and ask for reductions,” he said.

Last year’s municipal spending totaled about $4 million.

Holt is also expected to ask that all road work be delayed for another year because of the budget constraints. But, he said, he hopes the road committee will argue to retain some of the money at town meeting.