For two months the Montgomery County Council spent up to 16 hours a day in tedious deliberations over the fiscal 1978 county budget. Council members trimmed funds from some programs, increased the allocations of others or quietly approved the amounts County Executive James P. Gleason had recommended.

The final total of $516.6 million was $3 million more than Gleason had proposed and the process, as usual, was conducted in an atmosphere of decorum, if not camaraderie.

But in the last five days leading to Monday's budget adoption, the process seemed to unravel, bringing the budget sessions to a turbulent conclusion.

Hundreds of placard-carrying county government employees, angered by the Council's actions on their salary increases and health insurance payments, jammed the Council chambers and demonstrated for two days outside the County Office Building in Rockville.

The demonstrations also included a police work slowdown that began Monday morning and ended Monday afternoon when the Council reversed a previous action and approved a salary and benefits program acceptable to the county gevernment workers.

The Council's controversial actions may yet place a sizeable fiscal strain on the school system, may have boosted momentum toward unionization of county employees, damaged at least temporarily the Council's credibility with its employees and raised issues that are expected to figure prominently in next year's Council elections.

In general, the budget reflects the hold-the-line approach that both the Council and Gleason have taken in recent years in an effort to hold down the property tax rate. The final version includes a 4.2 per cent cost of living raise for county and school employees (the latter had been promised 6 per cent), and continues county employees' health insurance payments at the same contribution level as previously scheduled.

Whether the county's property tax rate of $3.91 per $100 of assessed valuation will have to be raised by one cent won't be known for another month, until revenue from the personal income tax can be gauged.

The net decrease of positions in the county government is minimal because the Council added positions to some departments, while it decreased positions in others. All of the positions cut were vacant.

As usual, for Council budget deliberations, controversy centered on the school budget which comprises about half of the county budget. This year, the school budget became even more pivotal because the school board and school employees had negotiated a 6 per cent cost of living increase.Traditionally, both groups are granted the same pay raises.

In addition, the council decided this year to begin equalizing benefits among the county employees by increasing their health insurance contributions to the same level that school employees pay. School employees pay 29 per cent of the cost of the program; county employees now pay 13 per cent, and under and old plan will pay 11 per cent beginning in July.

In the end, $6.2 million was loped off the school budget. The largest of the cuts was the $3.4 million needed to fund the negotiated cost-of-living raise, leaving the school board to decide whether to renegotiate, or to cut programs or staff to fund the agreed-upon raise.

Union officials have indicated that they will accept nothing less than 6 per cent. "There is a gut-level anger in the members," said Betty Culotta, president of the Montgomery County Educators' Association, the union for teaching professionals.

The last time school employees got a cost-of-living increase equal to the increase in the consumer price index was in 1974. "We can't eat . . . inflation three years in a row gladly," Culotta said. "How many times are we going to get spit on? When you become a teacher, you don't join a monastery. We have to feed and clothe our children, too."

Due to previous school board action, 1,800 school employees will not be hired during the summer for teaching or program planning. The Council also deleted the interscholastic sports program at all of the county's junior high schools and money for summer programs was reduced. Because of the latter cut, school officials say orientation for seventh graders may be eliminated.

The Council, however, maintained the seven period day in the county's nine smallest high schools where the size of the school makes it difficult to provide a comprehensive program in six periods. The Council sustained school board action eliminating the seven-period day in the six largest high schools now having such a program: Churchill, Gaithersburgh, Magruder, Northwood, Seneca Valley and Wooten.

The Council thinkered with, but ultimately left largely untouched, the budgets of other county agencies. It left the county debt service at $30.9 million, as Gleason had recommended, and approved the police department budget which, in effect, exchanged 42 unoccupied positions for 50 more patrol cars. Those patrol cars will become part of the department's "take-home" program that allows patrolmen to take their cars home.

The Council also expanded the county's Takoma Park-East Silver Spring bus system from 4 to 19 routes that will begin operating with the opening of the Silver Spring Metro station this November.

In its budget deliberations, the Council showed the same patience, willingness to work long hours, and attention to detail that has become its hallmark. Sympathetic observers appeared shocked, however, by the sequence of events involving the health insurance matter. On Thursday, the Council decided to equalize the percentage cost of health insurance for both county and school employees. On Friday, it made a partial reversal of its decision. And then on Monday the Council decided to allow the county employees to continue on their old payments plan.

"It seemed like they just caved in (to the county employees)," said a county government official. "You have to ask yourself what would they have done if the teachers came marching in after the county employees left."

Council President John Menke disputed that contention, however.

While stating that the disparities in health insurance payments among county employees needs to be equalized, Menke said the Council's attempt to remove the inequities in such haste without consulting employee groups was wrong. That, he said, was why their original decision was reversed.

Council members vowed that by next year the health insurance payments would be equalized. But Council member Esther Gelman said she doubted the Council would make such a politically charged decision in an election year.

"We say that now, but who's going to believe us," Gelman said in stating her belief that the Council would reap a "tremendous negative fallout" from the action.

The final days of the budget deliberation also seemed to have taken their toll on the cohesiveness of the Council. Bickering, sharply worded exchanges and overtly political moves became frequent during the last few days in a council that prides itself on being free of these things.

The situation climaxed Monday afternoon when a routine approval of part of the capital improvements budget was stalled when council member Gelman lashed out at three council members who said they would vote against it because they did not approve of the $12 million expenditure for a new county office building.

She said, "This is a completion of months and months and months of work . . . I don't think any responsible person has a right to take a walk on it. For three years, I have watched three of our fellow council members take a walk on it, knowing the rest of us would have to carry the burden. It's too heavy."

Gelman said she would vote along with the three dissenters, stalling action on the budget because the item needed a majority to pass. The situation was resolved only after Menke, one of the dissenters, agreed to vote for that capital improvements budget.

The effect of the incident was still visible hours later when the council finished its action. In those somber last moments, only six council members were present. Council member Elizabeth Scull was absent. She said later that she did not attend because she was disturbed about the maneuver over the county office building and because the council had not been able to figure out-how to equalize the health insurance payments.

Council member Jane Ann Moore who, after the budget was approved, summed up the emotions of a weary council, said, "We do all feel that we've lost something this year. We are chagrined at what we've had to see each agency suffer. We just simply have not enough resources to spread over the means."