The Maryland Arts Council recently announced that its projected budget for fiscal year 1979 is $1.2 million, a sizable increase over last year's budget of $860,000.

Budget funds, which are for the fiscal beginning July 1, come from two sources. The state will allocate $855,000 through the Department of Economic and County Development, which includes the Art Council. The remaining $345,000 will be a federal grant from the National Endowment for the Arts.

During the 11 years of its existence, Arts Council funds have grown significantly from its initial budget of $50,000, and the council's impact has spread from the Baltimore area to nearly every part of the state.

For community arts groups the most significant development has been the State-County Partnership program established 2 1/2 years ago. According to program Director Bob Benson , the purpose has been stimulate artistic activity on a county level throughout the state and to assist in forming county arts councils where none existed.

When the program began there were eight county arts councils in the state; now there are 24. "This would not have happened unless we were there to help start and to offer financial aid," said Benson.

Eliot Pfanstiehl, executive secretary of the newly formed Montgomery County Arts Concil, agreed. The partnership program "was a stimulus to local government funding which has allowed us to get on our feet," he said.

For the Montgomery County council and other county arts councils the economic stimulus has been the $3,000 block grants, which the state Arts Council has allocated on a challenge basis. The maximum amount of the grants, which must be matched by the county arts councils, will be raised to $5,300 in the new fiscal year.

The state ArtsCouncil also has offered help in generating local support for the arts and lobbying for local funds. Benson travels frequently about the state to visit local arts councils at their request, bringing ideas for fund-raising and even testifying before local legislative bodies.

"There is a lack of coherent policy for the arts within counties," said Kenneth Kahn, executive director of the state Arts Council. "Part of our purpose is trying to convince local councils that support for the artis is a mode of good government and a service, not a frill."

Kahn said that half of the Arts Council budget goes to major institutions most of which are in Baltimore. In fiscal 1979, for example, the Baltimore Symphony is slated to receive $300,000 and Center Stage, a theater company in Baltimore, $80,000.

"The state has a major role to play in support of major state arts organizations; they are the standard-bearers," said Kahn. He also noted that groups such as the Baltimore Symphony and Center Stage, though based in Baltimore, have statewide tour programs.

Maryland Arts Council Member Betryce Prosterman, a Chevy Chase resident, noted that deciding how to divide funds between local and majorinstitution is difficult.

Prosterman is one of II citizens appointed by the governor to serve without salary on the state Arts Council. Drawn from the ranks of educators, board members of arts organizations and businessmen, the council members meet II times a year. In deciding how to award grants, they are aided by advisory panels made up of professionals in each art discipline. The daily operation of the council and execution of council decisions are carried out by nine-member professional staff.

In its June meetings, the Council will decide how to allocate the major portion of its budget, roughly 80 percent, according to Kahn, but smaller grants for individual events are made throughout the year. In addition to its regular grant program, the council has introduced Campaign Grants to encourage local fund-raising. Under the new program, the council will award one dollar for every three raised locally if a group meets its goal in a fund-raising drive. The target amount of the campaign grant must be approved in advance by the council.

Although anyone may apply directly to the Maryland Arts Council, local groups are urged to apply to their own arts councils first. Funding may be available locally and, if not, local councils can assist in grant applications to the state agency.

For Prince George's County residents, the Arts Division of the Maryland National Park and Planning Commission may be contacted at 277-2200. According to Assistant Supervisor Ellen Pierce, the Arts Division gives grants locally and assists in helping apply for grants from the state Arts Council.

According to Pfanstiehl, the Montgomery County Arts Council does not yet have funds for local grants although future plans include such funds. For assistance with funding requests to the state Arts Council, local arts groups may contact staff member Nancy Boskoff at 468-4172.

The Maryland Arts Council can be contacted at (301) 684-6740 or at its offices at 15 West Mulberry St. in Baltimore. The council welcomes calls or visits.

"We do work very hard to de-mystify the bureaucratic Process," said Kahn. "We encourage face-to-face meeting."