Faced with budget uncertainties for the next fiscal year, including a possible state-mandated 10 percent across-the-board increase in teachers' pay, the Arlington County Board has decided to set aside at least $500,000 in reserve for teachers' salaries.

The board turned down a request for $908,000 in salary improvements because school officials acknowledged they have not yet devised a plan for spending it and won't before next spring. At that time, said County Board member John G. Milliken, a Democrat, the board could appropriate an even larger sum, depending on the School Board's recommendations and any General Assembly action on required pay hikes.

Board Chairman Ellen M. Bozman, a Democrat, said that if the legislature mandates a 10 percent pay increase for teachers, it would cost the county about $4 million extra next year, "more than we can bite off."

The $500,000 the board set aside during its meeting Saturday is part of $1.2 million the schools got from the county last fiscal year, but did not spend. As a result, the surplus reverted to the county's general operating reserve fund.

Since all but $265,000 of the $1.2 million was not to be used during the current fiscal year, Milliken said, it "didn't make any sense" to appropriate the remainder in this year's school budget since it would revert to the county again next June, and have to be reappropriated.

But the County Board's decision to set aside "a minimum of" $500,000 was marked by partisan exchanges between the Democratic majority and the Republican minority on the five-member board. At times, the discussion centered on which party was more in favor of improving teachers' salaries.

Republicans Walter L. Frankland Jr. and Dorothy T. Grotos wanted the full $1.2 million to go to school programs. But the Democrats, dissatisfied with some answers from School Superintendent Charles E. Nunley, argued for what they said would be a more cautious approach in light of budget uncertainties.

The two sides agreed to hand over $265,000 to be used this fiscal year for $60,000 word processing system at the Education Center, the operation of a black cultural arts center at the former Hoffman-Boston School ($30,000) and the expansion of computer programs in intermediate and high schools($175,000).

The board wrangled for nearly an hour over the School Board's request that the remaining $908,000 be put in a contingency fund for improving teachers' salary schedules in the next fiscal year.

A letter from School Board Chairman Simone J. Pace said "details of this improvement have not been discussed," although there was "some sentiment" for beginning a "master teacher" plan. A master teacher is one who teaches other teachers and is paid slighty more.

"Now is the appropriate time to follow through with all the talk about improvements in the schools," said Frankland, adding that the $908,000 could be used for starting a master teacher program, improving salaries for experienced teachers or implementing a merit pay system.

But the vagueness of the proposal and the fact that the funds would not be spent in this fiscal year prompted board Democrats to scale down the amount.