Burgeoning debt-service costs will prevent New York City from atttaining a structurally balanced budget from fiscal 1994 to fiscal 1996 and force severe service reductions, tax increases, or both, according to a report by the New York State Financial Control Board.

The report released yesterday analyzes the city's four-year financial plan and predicts budget gaps of about $1 billion in fiscal years 1994 through 1996. This figure takes into account service reductions and productivity improvements proposed by the city. The control board also forescasts a $168 million gap for fiscal 1993, which began July 1.

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