THE D.C. SCHOOL SYSTEM asked the mayor and city council for $396 million in operating money for the next fiscal year. The mayor recommended $16 million less, the council's education committee $14 million less. School officials said this would not be enough to make urgently needed improvements. Superintendent Floretta McKenzie, no showboater, threatened to resign. Now it appears the council is relenting a little. It's a good thing.

The improvements at issue lie in the secondary schools. In recent years, there have been steady improvements in test scores at the elementary level; on standardized tests elementary students have surpassed national norms. The better scores are thought to have derived in part from a tougher curriculum. The question now is whether the momentum can be maintained in the secondary schools. The problem is that, particularly in English and math, many secondary classrooms are crowded nearly to the point of paralysis.

There is a fairly well established correlation between class size and student performance. The National Council of Teachers of English says the ideal class size is 20 students. But 40 percent of the English and math classes in the city's secondary schools have more than 30 students, and some have as many as 38 and 40. The school system wants $1.6 million to hire enough teachers to lower the average English and math class size to 29. Give it the money; it could justifiably argue for even more.

In the junior and senior high schools, there is also now only one guidance counselor for every 400 students. For some that means little guidance and for others none at all -- in a system with large numbers of disadvantaged students who need precisely the kind of encouragement and special help good counselors can provide. The school system wants $800,000 to hire 25 more counselors, only enough to improve the ratio to somewhere between 350 and 300 to one. That money, too, should be readily provided.

After so many years of disappointment, the city school system is finally working. Not perfectly, as Mrs. McKenzie herself would be the first to acknowledge, but remarkably well. That may have led the mayor and the council to divert funds to other services, squeakier wheels. That's the wrong way to go. To a large extent a city lives by its school system. The mayor and the council committee did not ignore the schools this year. The budget contains large increases for school repairs and would buy more textbooks (about 40 percent of the junior and senior high students have to share books). But textbooks and roofs that don't leak are pretty basic. The schools need a little more.