Falls Church City Manager Anthony H. Griffin has proposed a 2-cent increase in the city's real estate tax rate to fund a $17.6 million city operating budget for fiscal 1987, which begins July 1.

But Falls Church Mayor Carol DeLong said the City Council will try to avoid a tax increase. "We'll try to cut the rate increase," she said. "We'll do the best we can."

The proposed $17,649,569 budget represents a $1.6 million, or 10 percent increase, over the current $16 million budget and would increase the city's real estate tax rate from 98 cents to $1 per $100 assessed valuation. This would raise taxes for the owner of a $126,700 detached single-family house by about $87, according to City Assessor William De Lanoy.

Last year, that house would have been assessed at $120,400 and the owner would have paid about $1,180 in taxes, De Lanoy said. If the proposed tax rate increase is imposed, the homeowner would pay $1,267, which takes into account a 5.2 percent increase in assessed value, De Lanoy said.

The City Council will adopt the budget late next month.

Last year, the council turned down a 3-cent real estate tax increase recommended by Griffin and kept the tax rate at 98 cents.

In his budget message to the council Monday night, Griffin said that his proposed budget funds no new programs but "basically continues those programs the council has approved in past years."

Griffin said he is proposing the 2-cent tax rate increase to "give the council some flexibility to deal with the uncertainties of the budget process."

"I will be very surprised if such an increase is enacted," he acknowledged.

Griffin cautioned that federal aid is expected to be down during the next fiscal year.

According to Falls Church Director of Finance Halsey Green, the city budget anticipates $84,500 in federal funds, down from a total of $204,761 this year. At the same time, Green said the budget anticipates $961,500 in state aid, up slightly from $943,077 this year.

Griffin's proposal must take into account a larger school budget this year. By city code, the School Board's budget request must be incorporated into the city budget unchanged, and the combined fiscal plan must be forwarded to the City Council.

For fiscal 1987, the School Board is asking $5.7 million, which represents a 13.1 percent increase over this year, school officials said.

Last month, the School Board passed a $7.4 million operating budget, a 12.4 percent increase over current school spending. The School Board's budget fully endorses a recommendation by Falls Church School Superintendent Warren Pace to use more than half of the $815,217 increase, about $500,000, to pay higher salaries to the school system's approximately 80 teachers, six administrators and 59 support staff employes.

If approved by the City Council, the School Board's budget would boost pay for new teachers to $18,040, a level comparable to those of other Northern Virginia school systems. This school year, Falls Church teacher starting pay of $15,700 is the lowest in Northern Virginia.

According to Falls Church public schools business manager Wayne Moore, the School Board's budget would raise the average teacher salary from $29,296 to $31,675.

Moore said the School Board's budget would fund the addition of about six new employe positions next year to compensate for an expected increase in the number of students by 71, bringing enrollment to 1,132.

Griffin's proposed budget calls for a 4 percent cost-of-living raise for the city's 250 employes, which approximates the increase in the federal consumer price index for the past year, according to Green. Last year, city employes were also granted a 4 percent pay raise, Green said.

Public hearings on the budget will be held March 24, April 14 and April 28. The council is scheduled to vote on the budget April 28.