WHAT IS the status of the city's continuing money troubles? The answer to that question comes in two parts: first, the city is a little less in the red than it might be if Congress had not raised the federal supplement last week by about $10 million. But the second part of the answer is that the city is so deeply in debt that nothing can save it from ending this fiscal year without a deficit. The mayor's cutback in city spending appears not to have been as successful as had been hoped, the tax package now awaiting final approval from the city council after months of delay is too little and too late to be of substantial help, and Congress did not come through with the full $61.8 million to supplement its payment to the city that the mayor had hoped to use to bail out the city.

Experts familiar with the city's finances, including Philip Dearborn of the Greater Washington Research Center, D.C. auditor Matthew Watson and former assistant city administrator for financial management Colin F. S. Walters, now project that despite the added taxes, the payment from Congress of about $45 million and some savings from cuts in spending, the city will end this fiscal year at least $60 million in debt. That amount will be added to the approximately $280 million debt that the District is said to have accumulated in the past. Much of that figure, however, may be inflated. For instance, the city is liable for severance pay, but the $280 million figure includes the possibility that every city employee would quit and demand severance pay. That is not likely. Fiscal experts say the real long-term debt is about $100 million.

Adding that long-term debt to this year's deficit, the city would be at least $160 million in the red come the end of the fiscal year, Sept. 30. How to resolve that problem is the city's current challenge. Among the mayor's options are additional borrowing from the federal Treasury, issuing bonds or setting up a Municipal Assistance Corporation, like New York City's, which would sell bonds for the city. But who would buy bonds from a city with so troubled a financial history? And would Congress approve? Borrwoing also has its problems: how could the already poor District afford to pay off a loan without raising taxes to unreasonable levels? Yet the District may have no choice but to borrow. In the meantime, it is essential that the city's unnecessarily large payroll be cut as sharply as possible.