GROVETON, N.H. -- First, it was the orders coming into Wausau Paper that dried up. Then it was the jobs.

Now, the stream of snowmobilers and ATV riders who stock up at Emerson Outdoor Outfitters en route to New Hampshire's north woods is slowing down, a victim of high fuel prices.

Battered by economic forces beyond its control, this village faces a bleak future in the wake of rising gas prices and the paper mill's closing, which threw 303 people out of work last December and drove a nail into the coffin of what was once a vibrant place.

Like other cities pinched by hard times, it now must find ways to conserve. After voters rejected a plan in March to give the police department leeway to close for a few hours a day if necessary, Groveton (pop. 2,485) eliminated its $60,000-a-year town manager's job, cut the police department's budget and began tapping surplus funds to keep water rates down.

"Groveton is hurting," said Selectman Jim Tierney. "The first tax bills are going out this coming week. That'll give us an idea as to where people are, by how many don't pay. That'll let us know just how much hurt there is."

Increasingly, the hurt being felt by consumers -- at gas pumps, grocery stores and malls -- is being felt by cities and towns that cope with the same harsh realities.

"Job losses have a roundabout effect on local governments," said Chris Hoene, director of policy and research for the National League of Cities, which represents cities and towns. "If you're out of a job, you need to draw on social service programs that government provides.

"(Layoffs) impact on consumer spending, which is another source of local government revenue," he said.

In Jeffersontown, Ky., the rising cost of gas has driven up the city's vehicle maintenance budget and will make it impossible to fill four police officer vacancies or fully fund a community outreach program, according to Mayor Clay Foreman.

Sometimes, the hurt is indirect. In New Jersey, the town of Fanwood sent layoff notices to all 70 municipal employees in anticipation of cutbacks in state aid that were, in turn, forced by a worsening state budget picture affected by the economy. It doesn't mean layoffs for all, but it's a first step in case they're needed.

"Most of what we do is essentials in life," said Steven Jeffrey, executive director of the Vermont League of Cities and Towns. "We don't go overboard when times are good, so there's not much fat to cut when times go bad. Through the variety of recessions we've had, work forces don't go up and down with the economic times. You still gotta plow the snow, you still gotta school the kids."

In this part of New England, paper is king. At least it was for most of the 20th century, with timber harvested in the nearby mountains being churned up and converted to coated "freesheet" paper sold as 8-by-11 sheets by office supply stores and stationers.

But foreign competition, rising fuel costs and plunging demand in the paperless economy of the digital age have taken their toll. Dozens of paper mills have closed, including several in northern New Hampshire.

In April 2006, Groveton Paper Board -- Groveton's other remaining paper-making operation -- closed, idling 108 workers and adding a cruelly ironic coda to the sign on its exterior wall. "Groveton Paper Board Inc. We're Here to Stay," the sign said.

It wasn't.