City officials notified D.C. School Board President David Eaton yesterday that the board will not get $7 million it had expected this year to fund pay raises school system employes are already receiving.

Angry board members, accusing the city of reneging on a pledge to provide the funds, scrambled yesterday to decide what to do about the shortfall.

Their alternatives, board finance committee chairman R. David Hall (Ward 2) said, include cutting salaries by 2 percent for the remainder of the year, cutting funds in other areas, or fighting the city in court. He said the board could also simply overspend its budget, but he did not explain how that might work and said such an option was unlikely.

The board learned of the city's decision yesterday when Eaton received a letter from city budget director Elizabeth Reveal that said school system spending this year "is not to exceed" $306.5 million, the amount originally budgeted for the current fiscal year that began Oct. 1.

That budget provided funds for a 5 percent pay increase for school employes, but the teachers and workers are owed a 7 percent raise this year. School officials said they believed the city had agreed to provide a $7 million supplemental payment to cover the difference, and they had already been paying employes the full raise.

Reveal said yesterday the city had planned to provide the $7 million, but that "in revising the FY 1983 budget for the city to reflect the lower anticipated city revenues for fiscal 1983, we found that we were unable to do that. Many city agencies are getting revised 1983 budget marks that are below the . . . figures approved by Congress during its consideration of the city budget last fall . That is not happening to the school system," Reveal said.

"I know the mayor is in a tough situation, but there are many ways to balance the budget," said Eaton, who said yesterday he would not mind seeing the city increase its personal income tax to raise additional funds. "The city can't play jerk and pull with the school system. It's not like filling potholes. You can let potholes go for a winter."

Some members of the board "want to go to war on this," Hall said, but added that he would try to meet with the mayor to discuss the issue. "In the past there has been a breakdown in communications between the board and the mayor," he said, "and I don't want to see that happen again."

Neither Hall nor Eaton indicated when the board might decide how to handle the shortfall.

The latest budget decision came just as board members were kicking off a campaign for more money in the coming fiscal year. The board had requested $336.4 million in what it calls a "hold the line" budget for fiscal year 1984, but Mayor Marion Barry's proposed FY 1984 budget contains only $318.5 million for the schools.

In a press conference yesterday morning, board member Linda Cropp (Ward 4) said the city should trim other parts of the budget instead of giving the schools less than the board requested.

D.C. schools superintendent Floretta D. McKenzie urged a group of about 700 school system principals, assistant principals and administrators meeting at H.B. Woodson High School to seek community support for the school budget.

"I have been very excited about the gains we have been making in programs, teacher hirings, and equipment," said Grace Bradford, supervising director of music for the city's schools. "Now it looks as if the bottom could fall out."