The Reagan administration's proposed fiscal 1989 budget maintains funding for arts institutions and agencies at virtually the same level as last year, for the first time drops attempts to slash arts funding and in at least one area requests a significant increase.

In the budget submitted to Congress yesterday, funding for the Smithsonian Institution is set at $252.5 million, almost a 10 percent increase from its 1988 federal appropriation. The National Gallery of Art, partly funded from the Smithsonian's budget, requested $38.5 million, up from an appropriation of $37.3 million in fiscal '88.

The National Endowment for the Arts requested $167.7 million, the same as its 1988 appropriation. The Humanities Endowment stays at $140.4 million. The Institute for Museum Services, the federal group that provides operating grants to the country's museums, zoos and botanical gardens, remains at $21.9 million.

"This budget request supports the administration's efforts to control spending by holding federal funds for the humanities to the level appropriated for FY 1988," said NEH Chairman Lynne V. Cheney.

The reaction from congressional leaders on the arts was laudatory but couched in an "it's about time" attitude. "I am very pleased that the administration has recognized at long last the important place the arts have in this country by recommending the same level the Congress approved last year," said Rep. Sidney Yates (D-Ill.), chairman of the House Subcommittee on Interior and one of the Congress' most ardent advocates for the arts.

"It is a recognition that the federal government has a legitimate role to play in nurturing the arts in this country," said Rep. Bob Carr (D-Mich.), chairman of the Congressional Arts Caucus. "The first year of the administration, the president was saying it had no role. In the intervening years he said there is a role and I'll begrudgingly admit it but it is a lower priority. This is not a 180-degree turn, but it's welcome news."

The Smithsonian's request will help the nation's largest museum complex to continue long-needed repairs on its facilities. "Limitations on funding in previous budgets have required us to defer certain repairs, which only become more costly in future years as deterioration escalates," said Smithsonian Secretary Robert McC. Adams. The Smithsonian has estimated that it needs $200 million for repairs.

The specific request for repairs and restoration is a 22 percent increase over fiscal 1988. It is now set at $20.8 million, compared to $17 million in FY '88. The National Zoological Park is targeted for $5.3 million in repairs and new construction. The Smithsonian also allocated $100,000 to plan renovation of the 30 permanent halls at the Museum of Natural History.

In addition, the Smithsonian requested an increase of $2.9 million for research and research support.