Falls Church residents will see a 17.5 percent boost in their property tax bills, along with increased water and sewer rates, if the city council adopts a budget proposed this week by City Manager Harry E. Wells.

The proposed budget calls for a 4-cent cut in the property tax rate -- from $1.19 to $1.15 per $100 assessed valuation. Homeowners will see their taxes boosted, however, by a jump in the assessed value of their homes.

The average owner of a house assessed in 1978 at $80,000, for example, probably saw his assessment climb to around $97,200. That homeowner would see his taxes hiked from $952 last year to $1,118.60 this year.

At the same time, Wells is proposing that the water rate be increased from $9 to $9.30 for the first 10,000 gallons used in a three-month period and from 98 cents to $1.04 for each additional 1,000 gallons. Sewer rates would rise from $8.40 to $12 for the first 10,000 gallons and from $1.43 to $1.80 for each additional 1,000 gallons.

If approved by the City Council, the combined increases would add about $9 to the quarterly bill of an average homeowner who uses 22,000 gallons of water.

The higher utility rates are proposed, Wells said, partly because city residents have been using less water this year than last -- cutting city revenue from water sales. Other factors include an expected dropoff in the construction of new homes, which will mean less revenue from water connection fees, along with skyrocketing increases in the cost of electricity, equipment repairs, materials and supplies.

More property tax revenue is needed to fund inflationary cost increases for a hold-the-line budget that includes no new programs. It is set at $10,806,361 for a 7.5 percent increase over this year's spending plan, Wells said.

City employes would receive an 8 percent cost-of-living pay raise under the proposed budget.

Despite such budget increases, Wells said, the city still has the lowest tax rate in Northern Virginia. Keeping the budget down meant "making some hard decisions," Wells said. "It was a choice really between improving services and my desire to have a minimal tax burden on the city's residents.