Alexandria School Superintendent Paul W. Masem proposed a $67 million operating budget for 1988-89 yesterday that calls for an 8 percent salary increase for teachers and the gradual elimination of 30 staff positions because of declining enrollment.

Though the proposed salary increase is smaller than the 9.8 percent raise teachers' received last year, it is still likely to meet some opposition from City Council members and City Manager Vola Lawson, who face added pressures from other city employees, especially police officers, for increases similar to ones given teachers. Last year city employees received a 5 percent raise.

Masem said his proposal, which represents a 4.28 percent rise over the current year's school budget, is a realistic one and defended the 8 percent teacher raise as a necessity if Alexandria wants to remain competitive with nearby jurisdictions.

"We must pay what the market demands," said Masem, in presenting his first budget proposal since his arrival here five months ago. "We simply must compete for the best teaching candidates, not settle for second best."

The budget falls within guidelines adopted last May by the City Council for this year's budget requests. Those guidelines called for limiting the increase in school personnel expenditure to 5 percent, and Masem's proposal calls for a 4.66 percent increase. For nonpersonnel spending, the guidelines called for a 3 percent ceiling on increased outlay; the superintendent proposed 2.23 percent.

Teachers' starting salaries would go up 6.3 percent, from $21,620 to $23,000, under Masem's request, and the average teacher's salary would become $38,795.

City Manager Lawson declined through a spokesman to comment on the proposed budget, which will be discussed at a joint council-School Board public hearing Feb. 18. The School Board is set to vote on the budget March 3 and the City Council will cast its final vote in May.

Masem's budget request for the 9,490-student system calls for a net elimination of 30 staff positions, mainly teachers, due to a projected decline in student enrollment to 9,338 next year.

There are approximately 1,500 employees in the school system. The staff reductions, to be accomplished mainly through attrition, will save about $1.15 million for the term of the budget, officials said. Under Masem's budget, nonteachers would get an average pay increase of 5.7 percent.

The city's share of Masem's proposed budget would go up 6.75 percent to $52.7 million. The state's share, which accounts for about 21 percent of the budget, would be $13.9 million. The school's fiscal year begins July 1.

The 8 percent teacher raise includes a 4 percent cost-of-living increase, an average 1.7 percent in-step raise and an additional 2.3 percent "to keep Alexandria teacher salaries competitive with neighboring systems," according to a statement released by school officials.

Masem announced yesterday a reorganization of his central office staff that would give principals more direct access to him in order, he said, to tighten accountability and improve communication. Also, he said he plans to create an Educational Programs and Services Division that will be responsible for staff training, adult education and special education services.