D.C. Council member John A. Wilson (D-Ward 2), vowing to fight Mayor Marion Barry's proposed tax increases, said yesterday the city is spending less on services and more to support a "bloated" city bureaucracy.

"It's not a question of services," said Wilson, who chairs the council's Committee on Finance and Revenue. "We bring in enough revenues to produce every service for residents of the District of Columbia. The money is taken from the services to pay for the bloated bureaucracy."

Barry, in his fiscal 1989 budget released Monday, proposed a $69 million, two-year tax increase that would repeal two income tax breaks now in effect and impose a 5 percent surcharge on individual taxpayers next year. The mayor said the money was needed to pay for expanding city services in such areas as social services and public safety.

Wilson, citing growth in payroll costs and the number of employees, said the mayor's request for 37,131 full-time positions next year represents a 22.1 percent increase in the number of employees since 1985. That figure does not include jobs funded by federal grants.

The District government employs one person for every 17 D.C. residents, Wilson said, adding that pay raises this year and next will cost $110.1 million.

"The mayor likes to say, 'We can count our money,' " Wilson said. "Of course, we can count it. The question is whether we can set priorities in how we spend it."

Barry said yesterday, "I am not going to get in a public debate with the council over the budget at this point. The ball is in their court. All I insist on is a balanced budget."

Wilson, who fought Barry's attempts last year to raise taxes, said an analysis of the city's 1987 annual audit shows that the District underspent its budget for services by $16.6 million while overspending by $3.6 million its budget for personal services, mostly employee salaries.

Council Chairman David A. Clarke, during a briefing before the council on the city's audit yesterday, told city officials he was concerned that departments such as human services, schools and housing had underspent their budgets for services, while overspending on such items as building rent, supplies and equipment.

Clarke said the council, which begins hearings on Barry's budget next week, would be carefully examining where the money is being spent.

Wilson, who is up for reelection this year, said yesterday he is concerned about the city's tax rates, suggesting that the poor pay more than ever and the better-off pay a disproportionate share.

Based on 1984 tax returns, he said, households with an adjusted gross income of $20,000 or more represent 33.2 percent of the tax returns and yet pay 77 percent of the income tax. According to a recently released report by the city's Department of Finance and Revenue, the District taxes low-income residents at a higher rate than all but one Washington area jurisdiction.

In a related matter, the council defeated a measure yesterday that would have created a special council committee to recommend action on the city's long-term pension liabilities.

Wilson, who has warned that the liabilities could become a major financial problem, said the city's pension payments and debt service represent the third largest expenditure in the budget, next to spending for human resources and education. Since 1986, that debt has grown 21 percent and is projected to grow rapidly in the future, Wilson said.

Wilson had urged his colleagues to vote for the committee, which would have consisted of council members Betty Ann Kane (D-At Large), who chairs the council's Committee on Government Operations; Wilhelmina J. Rolark (D-Ward 8), who chairs the Judiciary Committee that oversees the police and fire departments; Hilda H.M. Mason (Statehood-At Large), who chairs the Education Committee; Clarke and Wilson.

However, other council members said the committee was not needed because the funds are monitored by existing council committees.

Council member Jim Nathanson (D-Ward 3) joined the intended members of the special committee in voting for the measure, but it was defeated on a 6-to-6 tie. Council member Carol Schwartz (R-At Large) was absent.