ALBANY FINANCIAL PICTURE DARKENS.(CAPITAL REGION)

Byline: JAY JOCHNOWITZ Staff writer

The surplus holding Albany's $100 million budget together took a nose dive in 1998, dropping far more than the city predicted and creating a precarious cash flow situation this year, according to City Comptroller Nancy Burton.

In a report to the Common Council's Finance Committee, Burton also outlined a host of spending increases this year that could aggravate the problem even further and leave the city without enough money to pay its bills later this year.

``The cushion's gone,'' Burton said. ``If I were in the mayor's office, I would seriously be studying spending controls.''

Already aware that the …