Belfast's youth service budget allocation from the Department of Education of 3.2m for 2006-07 was nearly 500,000 lower than the year before.
Gerry McGuinness, senior education officer at the board, said: "The shortage is due to rising costs and salaries, and a funding formula that pays less for fewer young people."
Proposals include cutting club opening hours or making six workers redundant.
The youth committee, a sub-committee of the board, met education minister Angela Smith last Wednesday, who suggested that it consider "alternative funding options". A decision on what to cut will be made on 20 March.
Nelson McCausland, a board member, added: "Angela Smith said there is no money, but they have just produced 61m for children and young people, which projects might bid for."
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