The D.C. Department of Finance and Revenue ran into strong opposition from a skeptical City Council and disgruntled citizens yesterday on its proposal to increase user and permit fees for builders, electricians, restaurants and other businesses by an average of 34.8 percent.

The proposals, which city finance officials estimate would raise about $200,000 a year, would increase the cost of an electrician's permit fees for installations in an average residential home by $43 to $165 -- or more than twice the fees in some suburban jurisdictions.

Electricians now must pay $22 for a permit to install air conditioning in an average city home. That fee would increase to $29.65 under the proposal, compared to $8 in Arlington, $3.50 in Fairfax and $2 in Montgomery.

The proposed legislation also would double the current license fees for architects, undertakers and plumbers.

City Finance Director Carolyn L. Smith said that the schedule of fee increases was needed to cover the increased cost to the city of processing fee applications, but was modest enough to "avoid adverse impact on District businesses and consumers."

But the proposal was immediately criticized by the D.C. Builders Association, which contended that the costs would be passed on to homeowners and would accelerate the movement of city business to the suburbs.

"The wide discrepancy in fees dramatizes the need for more efficient management by the city," said Abba Polangin, a spokesman for the association.

The builder' argument struck a sympathetic chord with Council member John A. Wilson (D-Ward 2), chairman of the council's Finance and Revenue Committee, who likened the proposal to earlier gas and estate tax increases that were eventually rescinded by the council.

"You reneged on the gas tax, you reneged on the estate tax, why in heaven's name would I want to do this? So you can come back and renege on it?" Wilson asked Smith. "I learn from history."

Smith said that Mayor Marion Barry had proposed far more dramatic fee increases last year and retracted them after heavy public opposition. The current proposals of 34.8 percent for permit fees were calculated by compounding salary increases received by D.C. government employes since 1976, the last time fees were raised, Smith said.

A schedule of the fee costs produced by city officials shows most of the license fees would be relatively modest in absolute dollar terms. For architects, for example, the biggest impact would be in the cost of examination fees, which would jump from $80 to $160, and applications for reciprocity from out-of-state architects, which would be raised from $90 to $180.

Annual renewal fees for architects would increase from $20 to $40, undertakers fees would rise from $25 to $50 and those for plumbers and gasfitters from $30 to $60.

Yesterday's hearing at the District building was to obtain public testimony. The Finance and Revenue Committee is expected to take preliminary action on the bill later this year.