The Vancouver Art Gallery is about to celebrate its 80th birthday, with an operating deficit approaching $1 million.

VAG Director Kathleen Bartels says the $886,000 budget shortfall was run up during the 2010/10 fiscal year ending in June. It was revealled on Thursday at the gallery's annual general meeting.

Bartel attributes the deficit to a drop in tourism and the global economic downturn.

"I think there was a surge in people thinking things were better and here we are again in a difficult economic time that is happening globally," she said.

Bartels said the VAG will manage the deficit internally without layoffs and won't be asking for a bailout.

"The gallery management team has worked very hard to reduce other expense areas so we won't have any reductions at this time with staff layoffs. We have no plans at this point to seek public funds to address the operating deficit," she said.

The deficit also won't affect plans for a new art gallery in a new location, she said. The gallery is currently attempting to raise an estimated $300 million for a newer, larger home in downtown Vancouver.

"Our board of trustees and management are facing this head-on and looking at a long-term strategy. I think we will successfully steer the organization through these really challenging times."