New York City bonds, with Mayor Rudolph W. Giuliani in office, yield about 60 basis points more than triple-A bonds. When David N. Dinkins held the office, New York City bonds yielded 240 basis points more. Keep an eye on that spread.

The differential is a good measure of the city's financial health and a check on fiscal mismanagement. It will come under close scrutiny in coming months as the Giuliani Administration struggles to bring spending under better control and into some son of alignment with revenues.

If the spread widens, it will show that investors are becoming increasingly disturbed about the long-term outlook for the city. If it widens, pressure on the Giuliani Administration will mount. If it widens, services in the city are more likely to suffer unless the administration can make the city's 216,000 employees more productive. It's fair to say that it's more likely to widen than to narrow.

As Michael Brooks of Sanford C. Bernstein & Co. suggested to staff reporter Charles Gasparino last week, the spread is likely to inflate somewhat but not to become nearly as wide as it was when Dinkins occupied City Hall.

The $31.6 billion Giuliani budget last week was assaulted on Wednesday by New York State Comptroller H. Carl McCall and on Thursday by the state Financial Control Board. Too many questionable savings and risky assumptions, they cautioned, and this week, New York City Comptroller Alan G. Hevesi is scheduled to weigh in with his views. Stem warnings are hitting the city's budget from all sides, and the alarms are likely to worry bond traders and investors and enlarge the gap.

According to Allen J. Proctor, executive director of the Financial Control Board, the major criticism of New York City's fiscal 1995 budget and its four-year spending plan is a lack of direction toward a true restructuring of the inner workings of government. All the short-term spending cuts and scrambling for quarter-billion-dollar chunks of revenue are not good substitutes for basic longterm change.

Everyone knows that effecting the changes that the control board advocates is a heroic task. The spread between city bonds and triple-A bonds will measure success or failure and help maintain the city's long-term well-being.

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