The Alexandria City Council approved a "bread and butter" budget of $146 million last night that will cut the real estate and personal property tax rates and give teachers and other city employes 4 percent raises.

The two-cent reduction in the real estate tax rate -- the first cut in four years -- still will not lower the tax bills of most Alexandria homeowners because assessments have been rising with the value of housing.

City Assessor David J. Chitlik estimated that the value of the average single-family home, which now costs $112,400, will rise by 4 percent next year, to almost $117,000. The owner of such a home would get a tax bill for $1,625, about $40 more than this year's bill. The new tax rate is $1.39 per $100 of assessed valuation.

Mayor Charles E. Beatley used the phrase "bread and butter" to describe the budget because "it doesn't introduce a lot of desserts" in the form of new city services, programs or additional employes.

Acting City Manager Vola Lawson said more than $1 million in unexpected state funds and a broadened tax base enabled the council to lower the tax rate.

The council trimmed the personal property tax rate, which in Virginia is levied on autos, office equipment, trailers and boats, by 10 cents per $100 in assessed value. It went from $5 per $100 in assessed value to $4.90. Because of the wide-ranging value of personal property items, city budget officers said there is no "average" personal property tax bill. But for the owner of a car valued at $10,000, the cut will mean a $10 savings. Instead of paying $500, the tax would be $490 next year.

Lawson said that because Alexandrians were following the national trend in buying new cars in greater numbers the personal property tax base had broadened for the third year in a row.

The most controversial item in the budget was the teacher salary increase. Alexandria's teachers had demanded 5 percent raises and protested the plan to give them only 4 percent by a week-long work-to-rule job action last month.

"Sure, we're angry," said Pamela Walkup, president of the Education Association of Alexandria. "This city simply doesn't offer sufficient salary to ensure that the best come here to teach."

The base salary for a beginning teacher in Alexandria will be $18,200 next school year including the 4 percent increase, according to John E. Duvall, Alexandria public schools personnel director. Walkup said that figure is lower than beginning salaries offered teachers in Arlington and Fairfax counties.

Duvall estimated that the average teacher's salary will be $34,700.

The budget for the fiscal year starting July 1 raises the school budget to $41.9 million, 4 percent above current spending.

The council also approved an $84.6 million capital improvement program, which will span six years. Among the immediate items to be implemented are building a high school rowing facility, completing City Hall renovations and dredging the waterfront.

Beatley, who approved his 15th and possibly last city budget as mayor last night, said he thought the budget was "very straightforward." Former Vice Mayor James P. Moran Jr. defeated Beatley in the municipal election a week ago. "Sometimes there's a lot of tricky last-minute juggling," Beatley said. "Tonight there was none."