New York City Comptroller Elizabeth Holtzman said yesterday that city budget officials should establish a reserve fund to help prepare for a big budget shortfall looming in the next fiscal year.

"The city should put away any savings now to have money to close its large fiscal year 1994 budget gap," Ms. Holtzman said in a press release accompanying a quarterly report prepared by her office.

The comptroller's report comes in response to the city's financial plan for fiscal years 1994-96. New York City ended fiscal 1992 with a balanced budget, and city officials plan to roll over surpluses into fiscal 1993 to maintain a balanced budget. Fiscal 1993 begins July 1.

Ms. Holtzman's office estimates a $1.3 billion shortfall in fiscal 1994. The city also faces a projected $1.2 billion gap in fiscal a projected a $1.3 billion shortfall in fiscal 1996, the report says.

To prepare ahead, the report says, the city should establish a "special reserve fund" that would store 1993 savings to close gaps in 1994.

The reserve fund could be injected with $26 million the city saved during its last seasonal borrowing, the report says. In that borrowing, the city issued $700 million in revenue anticipation notes and $700 million in tax anticipation notes at extremely low interest rates.

The report says the city could also bolster the reserve fund by keeping work force levels 2,000 positions below the levels recommended in its financial plan, and by making other productivity improvements.

The city currently employs 2,301 employees less than the 236,409 called for in its plan. By keeping its work force at present levels, the comptroller's office says the city could save $43 million in the current fiscal year.

In addition, the report lists several "major problems" in the financial plan that contribute to imbalances. These include a reliance on a controversial mirror bond refinancing and state legislation. The city is counting on Gov. Mario M. Cuomo's Medicaid takeover, an increase in state education aid, and taxes on gasoline and cigarettes to produce $841 million for its fiscal 1994 budget.

The report also says the city may have overshot its projection of $120 million in revenues from its Safe Street/Safe City lottery in fiscal 1995 and 1996. The report says the city only received $2 million in fiscal 1992 through the lottery, making the 1995 and 1996 estimate too optimistic.

"Dreams may help sell lottery tickets, but they don't balance the city's budget," Ms. Holtzman said in a press release. "It's time to be realistic about the prospects for" the lottery.

In response to the comptroller's report, an official from the city's Office of Management and Budget said that the budget office, in designing its financial plan, is aware that the city faces large potential deficits.

The official, who asked not to be named, said the city budget office will release its updated plan on addressing these gaps in November.

The official refused to comment on Ms. Holtzman's plan to set up a reserve fund. "The financial emergency act requires that we keep a general reserve," the official said. "I don't know if we will add to that."

The official said the city's general reserve contains $150 million for fiscal 1993, $150 million for fiscal 1994, $200 million for fiscal 1995, and $200 million for fiscal 1996.

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