A budget committee of the D.C. City Council yesterday recommended an increase of $580,000 for the D.C. Commission on the Arts for next year but decided against earmarking any of it for certain arts institutions, as Mayor Marion Barry had requested.

The commission will receive approximately $1.3 million in fiscal 1983 if the D.C. City Council approves the measure.

What some of the Human Services Budget Committee members objected to was Barry's singling out eight local arts institutions for $45,000 grants and his allocation of $100,000 each to Lansburgh's -- the downtown arts center -- and the Ellington School of the Arts.

"Once the mayor starts giving out money among groups, you'll open a Pandora's box," said City Council member John Ray, who questioned the allocation during a budget hearing nearly two weeks ago. "You end up with every City Council member finding his favorite group and trying to give it a little piece of the pie . . . We should not get involved in identifying specific groups. We should let the commission do that."

Ray, who is running for mayor, said, "Marion thought that I or other Council members would not have the gall to bother this. The boards of those arts institutions are full of very powerful people."

The groups were Arena Stage, the Corcoran, the Washington Performing Arts Society, The Rep Inc., Washington Ballet, Washington Opera, the Capital Children's Museum and the National Symphony Orchestra.

Council member Polly Shackleton said she personally had no problems with the proposal, but that "there were strong feelings against it on the committee." Council member Wilhelmina Rolark was opposed to it as well. Said Shackleton, "She was concerned that not enough money was going east of the Anacostia river."

The committee recommended that the arts commission report back to the City Council on how they used the funds. "We don't have a provision that says we can veto it," said Ray. "The members of the City Council just want to see who's going to get what and why."