Russia's tax shortfall reflects a fundamental, though solvable, problem.

Administration officials said yesterday that the tax shortfall would lead to additional budget cuts that would have to be made with the approval of the City Council.

The latest tax shortfall brings to nearly $1 billion the amount that the administration has been faced with trimming from the current budget since last summer.

Mayor Dinkins said that because of expected cuts in state aid and tax shortfalls, New York City faced a new budget gap.

B4 The city faces a new budget gap of $250 million because of cuts in state aid and tax shortfalls, Mayor Dinkins said.

By October, advisers to Mayor Giuliani said the tax shortfall amounted to $170 million, so they revised their forecasts downward for the rest of the year.

Since then, projections of increased spending, higher debt service and tax shortfalls have created a new gap of about $450 million, according to preliminary figures compiled Friday.

The temporary tax shortfall would be more than offset by the return of revenues that further tax cuts would have erased.

Officials expect a $100 million tax shortfall because the Sept. 11 attacks hurt the state's top industry, tourism.

The tax shortfalls of self-governing regions exceed 20% of the budget, compared to the period before the crisis, which is unsustainable.