The Washington Suburban Sanitary Commission yesterday proposed a $337.5 million budget for the next fiscal year that would be 16 per cent larger than this year's budget and would mean higher water and sewer bills for its customers in Montgomery and Prince George's counties.

The businesses that are the largest water users would get the biggest rate increases under the WSSC's proposal. The commercial user whose bill for 244,000 gallons a year is now $407.48 would pay $87.84 more next year as the combined water and sewer rate goes up by 36 cents to $2.03 per 1,000 gallons.

The average residential user - the family of four that consumes 90,000 gallons of water a year - would pay a combined water and sewer rate of $1.97 per 1,000 gallons, 24 cents higher than the current rate. The bill would increase by $21.60 a year, from $155.70 to $177.30.

The WSSC, which provides water and sewer service in Montgomery and Prince George's, bills its customers quarterly.

The governments of both counties will hold public hearings s on the WSSC' proposal budget and can call for changes.

The budget proposal is "heavily balanced toward maintenance and operations," according to WSSC spokesman Arthur P. Brigham.

He said the $47.5 million increase proposed over the current budget includes only $4.5 million for new or expanded plants and new maintenance programs.

Rising costs for electric power and fuel oil have boosted costs drom $7.8 million to an unexpected $10.6 million, he said.

Other higher costs contributing to the budget increase include a 5 per cent cost-of-living raise for WSSC employees costing more than $1 million and Social Security and retirement increases expected to rise by 26 per cent to $975,000, Brigham said.

As a means of rewarding conservation, the WSSC recently adopted a sliding rate scale that gives lower rates to those who use less water. Such a sliding scale will be retained in the fiscal 1978-79 budget.

For the current fiscal year the WSSC requested a 10 per cent increase in its budget but was granted only a 6 per cent increase.

WSSC chairwoman Vera Berkman said in a written statement the proposed budget will help carry out several new programs designed to improve the agency's "operational productivity and effectiveness."

She cited a new zone concept for maintenance and operations, reduced crew size and programs such as improved fire hydrant inspection.