While major local governments and the states of Virginia and Maryland are fighting to reduce budget deficits, Fairfax County expects to have a $2.7 million surplus June 30, the end of this fiscal year.

The surlpus is attributed to an unexpected $1 million received from personal property taxes, and to increases in automobile registration stickers, building permit fees, U.S. grants and state funds.

"The Board of Supervisors was very prudent in (cutting) its expenditures last year and the year before," said James P. McDonald, director of the county's budget department. "We're in a good posture right now while other jurisdictions are not."

McDonald also said revenue estimates were not overstated "as they are in other jurisdictions."

In Montgomery County, a jurisdiction that shares with Fairfax the distinction of being one of the richest counties in the nation, instituted a job freeze last December to save money, according to John W. Short, director of the county's budget and research department.

"Obviously there has to be a lot of crystal ball gazing," Short said. "We obviously will have some problems due to the cold weather and continuing inflation. We hope to stay within our budget but that's about the closest (figure) I can give right now."

Although many indicators in the Fairfax County's mid-year budget review presented yesterday to the Board of Supervisors pointed toward growth and a prosperous financial base, McDonald noted that the county's sales tax revenues dropped.

"Sales are dowm and of course that's the shortfall the state is talking about" McDonald said. "You might see more people at shopping centers, but eole are being more discreet in what they're buying."

County residents are buying slightly more cars than previous years and the county also exects 38.8 per cent more funds from building permit revenues, but this increase could be due to the increased cost of homes and not necessarily a marked increase in the number of new houses being built, McDonald said.