Penumbra Theatre has cancelled two of the five plays in its current season, the St. Paul company announced Tuesday. The programming cuts come as the theater disclosed that it has a $500,000 shortfall on its $3.2 million budget. The fiscal gap is due to lower-than-expected sponsorship income for out-of-town productions, including a tour of Dominic Taylor's "I Wish You Love," which sold out its run at Washington, D.C.'s Kennedy Center.

The shortfall is also because of asset depreciation, theater officials said Tuesday.

"This is not the death-knell for the theater by any stretch," said board member Jeff Saunders, a partner at the law firm of Dorsey & Whitney. "This is about ensuring that we are able to continue to bring Penumbra's mission to a broader audience. We are finding new ways to serve our audiences beyond the mainstage in a very tough economy."

The plays that have been canceled are Kara Lee Corthron's "Julius By Design," which was slated to open Feb. 9 and which had been postponed from a previous season; and Pearl Cleage's "Bourbon at the Border" (March 29-April 22, 2012). Both are wrought dramas. "Julius" is about loss and forgiveness in the wake of a tragedy while "Bourbon" orbits the struggle for black voting rights.

Cutting the two dramas saves about $350,000, said managing director Chris Widdess. The rest of the shortfall will be made up "through other cuts."

She added that the shortfall is being made up by a line of credit that "we do not want to convert to long-term debt."

Ticket holders may donate to the theater or call the Penumbra box office at 651-224-3180 for refunds.

Penumbra has periodically altered its season in the name of fiscal prudence over the years. It has also been unusually transparent in that effort, sending out releases and holding interviews with the press.

"Since 2004, we made a commitment to be upfront with all of our stakeholders — from staff and board to funders and audiences," said Widdess. "This is a vital institution that will continue to move forward."

The onetime artistic home of Pulitzer Prize-winning playwright August Wilson, Penumbra has had a successful season at the box office, even if its 250-seat theater can only contribute so much to

Total earned income was $1.1 million last fiscal year, which ended June 30, up 53 percent over the previous year. Contributed income was $1.7 million, up 11 percent. Ticket revenues also increased by 35 percent to $800,000, in part because of co-productions with larger venues such as the Guthrie, where the company presented Wilson's "Ma Rainey's Black Bottom," and the Kennedy Center, where it had "Love."

In fact, an encore production of "Love" at Penumbra, which currently stars Dennis Spears as Nat King

In the spring, Penumbra founder Lou Bellamy will stage James Baldwin's "The Amen Corner" at the Guthrie. That production will star Greta Oglesby.

"Announcing budget cuts is not something that we like to do but we're going to make the best of it," said Bellamy.