Mayoral candidate John Ray, warning that the District's next chief executive must govern in an era of diminished resources, said yesterday he might consider increasing taxes, except those on personal property and income, to strengthen the city's financial condition.

Ray predicted it would take as long as three years to get the District's fiscal house in order and said he would make education and black economic empowerment priorities of his administration.

The 47-year-old lawyer and veteran D.C. Council member also said he would pay for several new programs, such as early childhood development centers, by eliminating the more than $200 million in waste he said could be found in the city's annual operating budget.

During a luncheon interview with reporters and editors of The Washington Post, Ray, one of five Democrats in the party's Sept. 11 mayoral primary, said the next mayor will have to respond to a slowdown in the growth of the city's tax base by holding the line on local government services.

"We are not going to be able to keep growing at the pace that we've been growing," Ray said. "Rather than doing five or six programs, we're going to have to do two or three that we feel are priority programs."

In contrast to most of his rivals, Ray said increases in some taxes might be needed to revitalize the city treasury, which some experts predict will suffer a $100 million shortfall in the coming year.

"We're not going to increase the taxes on income or personal taxes," Ray said, "but I have not closed the door to . . . some kind of income-generating mechanism.

"I'm not like George Bush," Ray added, referring to the election-year pledge against new taxes the president made before rescinding it this year. "I don't say 'Read my lips.' "

Ray said he believed there are several interim steps that could be taken to forestall the need for new taxes, including cutting the "unbelievable" waste in D.C. government.

Ray cited as examples of wasteful spending the government's renting a vacant building on H Street NE for nearly $2 million, and abuses in road construction projects that allow some contractors to reap profits of 100 percent on some street resurfacing jobs.

"I can tell you we're spending millions and millions there that we should not be spending," Ray said.

On other issues, Ray said he would cut the city payroll mainly through attrition, rather than through wholesale cuts as some rivals have proposed, and he dismissed criticism that he has received too many large campaign contributions from members of Washington's real estate development community.

"If you look at the record on the city council, I don't think there's any candidate who has a better record in opposing development than John Ray," he said.

"This argument that I'm the developers' candidate is not right and it's not accurate."

Ray, a member of the D.C. Council since 1979, is making his third campaign for mayor in the Democratic primary election against lawyer Sharon Pratt Dixon, Del. Walter E. Fauntroy, Council Chairman David A. Clarke and council member Charlene Drew Jarvis (Ward 4.).

Former D.C. police chief Maurice T. Turner Jr. is unopposed in the Republican mayoral primary. He will face the winner of the Democratic primary in the Nov. 6 general election.

The leader in campaign fund-raising and nearly all published polls, Ray was especially critical yesterday of Fauntroy, who he said was an example of "emotional, pep rally-type leaders that make us feel good, and when the dust settles down there isn't anything there."

On the subject of developer contributions in the election, Ray said: "Fauntroy's tried to make it an issue because he doesn't have any other issue."

Ray said that while he believes the District is polarized along racial lines, a deeper problem needing government's attention is the economic disparity between black and white residents.

As mayor, Ray said, he would use the office as a platform to promote investment and entrepreneurship in black communities blighted by crime.

"We are raising a generation of young people whose values are just so out of sync, because from the day they're born all they see is drugs, crime, violence," Ray said.

"My message is that black folks are not the enemy of white folks, and white folks are not my enemy, and Latinos are not our enemies, and Koreans are not our enemies and gays are not our enemies. Drugs, crime, poor housing and ignorance -- those are the enemies.

"The mayor has to stand up and say to our white friends in this city that it's in the best interest of all of us to give economic empowerment to the black community," Ray said. "Ultimately, the minority must find a way to achieve the same goals that others have achieved, and economic empowerment is key to that achievement."

Ray said that without private industry playing a greater role in hiring former prison inmates and former drug abusers, the burden on D.C. taxpayers will increase.

"We've got to be willing to give full citizenship to those who have been incarcerated, those who have had drug habits, because if we're not willing to do that, we're going to have to pay for them," Ray said.

On another topic, Ray said there are "one or two" senior officials in the administration of Mayor Marion Barry that he would ask to stay on after the election, but he declined to name them.