The Fairfax County Federation of Citizens Associations has recommended a 12 cent reduction in the county real estate tax rate for fiscal 1979 and 1980. The federation proposal would set the rate at $1.62 per $100 of assessed valuation.

The federation also recommendation $16.9 million in cuts in the $586 million budget submitted by county executive Leonard Whorton.

The largest cut proposed by the federation is an $8.1 million trim in the school budget. Other substantial cuts proposed include:

Cutting the Board of Supervisors [WORD ILLEGIBLE] fund from a proposed [WORD ILLEGIBLE] to $200,000.

[WORD ILLEGIBLE] 11 new storm sewer maintenance positions and one sign painting position in the Department of Public Works for a savings of $104,000.

Cutting $288,000 from the county's Housing Assistance funds used to match federal Housing and Urban Development Community Development Block Grant Funds.

Decreasing the county's Metro subsidy by $1.172 million through a renegotiation of the subsidy formula under which the county is currently charged.

Elimination of 10 positions, one of them new, in the Equipment Management Transportation Agency for a savings of $138.696. Cutting all county-paid travel using EMTA vehicles, by 6 percent. Police and fire transportation would be unaffected, and the savings would be $285,700 over proposed budget projections.

The federation is also urging the County Board to revise the proposed budget to reflect $7.1 million in additional revenues to the county, which the federation says will accrue because of county revenue underestimations.

The federation says it expects the county's FY 1978 year-end balance to total about $15 million. The annual Virginia State Audit revealed the county had a balance at the end of fiscal 1977 of $10.1 million.

If the federation has its way and the supervisors do drop the tax rate by 12 cents, an owner of a $70,000 house this year will save about $91 on his next year's tax bill, assuming an average increase of 8.5 percent in assessed valuation. According to Whorton, who addressed the federation at its meeting last week, real estate values have increased at an average of 8.5 percent over the past year.

Last year the federation asked the Board of Supervisors for a 16-cent tax cut.

"It was ignored," said federation president John Lynch.