Alexandria teachers reacted angrily yesterday to the City Council's refusal to grant them a 5 percent pay increase and said they will stage a work-to-the-rule job action today to protest the new city budget.

"Teachers are upset and discouraged," said R. Alan Caudill, the executive director of the Education Association of Alexandria. "And they want to show it."

His statement came hours after the council approved what Mayor Charles E. Beatley called a "bread-and-butter" $145.7 million budget in a session late Monday night. The budget, effective July 1, gives teachers and city workers a 4 percent pay increase and cuts the real estate and personal property tax rates.

Caudill said many of Alexandria's 741 teachers are expected to join the protest. It will be the second time in three weeks that the teachers said they will display their anger by working the minimum required by their contracts. They will not grade papers, help students, or attend meetings outside the normal school day, Caudill said.

"Sure, I'm angry," said Pamela Walkup, president of the teacher group. "They could have done more for us. It's nice to cut taxes, but I think the future of our city depends on what we are doing for our kids . . . Alexandria is not going to be able to attract the best teachers if they don't offer a sufficient salary."

City officials said they preferred giving all city employes the same pay increase and could not justify spending the $434,000 needed to give teachers a 5 percent increase.

Walkup, the president of the EAA, which represents most of the city's teachers, said teachers should not be compared to other employes because they have been "so long neglected." Under the new budget, a beginning Alexandria teacher will be paid $18,200 a year, according to John E. Duvall, the school personnel director.

Duvall said that the average Alexandria teacher's salary, which is based on experience and education, will go to $34,700 next year. For most teachers, the extra percent would have meant $100 and $300 more a year.

With no hope of getting that increase next year, the work-to-rule job action is a message to the council's "new leadership," Caudill said. "Hopefully the new mayor will be more sensitive to teachers' needs."

Beatley, who presided over his 15th budget session as the city's top elected official Monday night, was defeated May 7 by former vice mayor James P. Moran. The new mayor and a new city council will take office July 1.

Beatley said the new budget "doesn't introduce a lot of desserts" in the form of new city services, programs or additional employes. It does, however, increase overall city spending over last year by 5.2 percent.

The new tax rate lowers the $1.41 per $100 assessed valuation to $1.39. The two-cent reduction in the real estate tax estate -- the first in four years -- will not lower the tax bills for most homeowners because assessments have been rising.

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

Acting City Manager Vola Lawson said that an unexpected increase in state street maintenance funds, a broadened tax base, and a reduction in the subsidy the Alexandria must pay the Washington Metropolitan Area Transit Authority enabled the council to cut the rates.

The personal property tax rate, which is levied on motor vehicles, office equipment, trailers, airplanes and boats, was cut by 10 cents, trimming the $5 per $100 assessed value to $4.90. The owner of a $10,000 car will get a savings of $10 as a result.

The new budget allocates $41.9 million for schools, 4 percent above current levels.