The bus service that Montgomery County provides students who attend private schools was discussed by the board of education this week amid allegations the board staff is anti-Catholic.

The busing matter was discussed in light of possible cuts that may have to be made in the $272 million budget the board submitted to the County Council. County Executive James P. Gleason has suggested that the budget be slashed by $10 million and some board member fear the Council, which has the final say, will mandate cuts.

The transportation issue was examined to determine whether the service should be continued, curtailed or possibly eliminated. However, the board did not make a decision but instructed its staff to further study the issue.

About 820 private school students use county school buses. Most of the students attend Catholic schools.

The discussion at the school board meeting lasted two hours and was frequently interrupted by shouts and applause from the 150 persons in the audience. The audience included clergymen, nuns, school children dressed in uniforms of Catholic schools and howling babies.

"This issue is one of the most controversial in the area of public education," schools superintendent Charles M. Bernardo said, as the hearing began.

David Larkin, who represented the Maryland Federation of Catholic Laity, began his almost 20-minute speech with allegation that members of the board's staff were anti-Catholic. He said that possible moves to restrict the busing of private school students were "based on prevasive anti-Catholicism . . . and resentment that Catholic schools flourish."

Larkin did not specifically name any members of the board staff nor did he direct his remarks to any individuals on the school board.

Advocates of the busing service had originally been allocated a total of 10 minutes, but the time was extended at Larkin's request and after persons in the audience yelled complaints about the time limit.

After Larkin's speech, the board was presented with a petition that was said to contain more than 5,000 signatures of persons in favor of continuing the bus service. The board was also told that Catholics constitute 30 per cent of the county's population.

Andrew Gunn, executive director of Americans United for Separation of Church and State, told the board that while public school students and private school students should receive equal bus service, the service now favors private school students. Gunn said his son attends a public high school in Gaithersburg outside his school area (as allowed under the county's open transfer program), but is not eligible for public school bus service.

While the state gives the county $74 for every county public school student who is bused, the state provides no money for private school students who are bused. The state also deducts $74 from the county's school transportation subsidy for every private school pupil who uses school buses provided by the county.

The total deduction for the 822 private school students who use county school buses is expected to total $68,000 this year. Besides the two special runs, some private school students use regularly scheduled school buses that have space available.

In light of the schools uncertain fiscal situation, the school board also has decided to notify almost 1,000 first-and second-year public shool teachers that their contracts will be terminated at the end of this school year.

The terminations will be subject to change, however, depending upon how much money the County Council appropriates for next year's school budget. Final Council action on the budget is due May 15.

The board was forced to decide to terminate the contracts of 998 probationary teachers because, under state law, first-and second-year teachers must be informed by May 1 if their contracts will be terminated. Superintendent Bernardo said that because the school officials will not know until May 15 if there will be enough money, it will be necessary to terminate the teachers.

It will be the second year in a row that such action has been taken. Of the 996 teachers who were notified last year that their jobs were terminated, all but one who wished to keep teaching with the system was rehired, school officials said. The county eventually hired 372 new teachers to fill positions made vacant by attrition.

In other action at Tuesday's meeting, the board indefinitely delayed taking action on naming 22 schools for study for possible closing. The board tabled Bernardo's resolution on the schools until the boards staff has reviewed policy on small school closings.