ANNAPOLIS, OCT. 19 -- Anne Arundel County officials are expressing cautious optimism that a local property tax limitation proposal on the November ballot would have far less of an impact than they originally predicted.

Based on an informal legal opinion of how the proposal would work, budget analysts have dramatically lowered their estimates of what it would cost the government and save individual taxpayers.

At first officials estimated that the initiative would drain $8 million from county coffers next year and $118 million over the next five years. Now they put the first-year loss at $1 million to $2 million and think it would not rise significantly in subsequent years. Anne Arundel's operating budget is $616 million.

Robert C. Schaeffer, president of the citizen group that petitioned to get the initiative on the ballot, said today that he disagrees with the county's new interpretation. His proposal would save the typical taxpayer hundreds of dollars next year, he argues, not the $10 the county now estimates.

"The county's blowing smoke again, trying to make something where there isn't anything because they know they are going to lose this thing," Schaeffer said. Recent public opinion polls indicated that 68 percent of Anne Arundel's voters support the tax limitation initiative.

The revised estimates were prepared after Assistant County Attorney David Plymyer concluded that the proposal does not necessarily apply to taxes generated by new homes and buildings. (The initiative would limit annual increases in the county's property tax revenue to 4.5 percent or the rate of inflation, whichever is lower.)

Plymyer said the initiative appears to link revenue increases to the "constant yield tax rate," which is a state-issued formula for calculating the property tax rate needed to produce as much revenue as was raised the year before. Before setting a county's constant yield rate, the state discounts construction that is due to come on line. For that reason, Plymyer thinks the tax limit would too.

According to Plymyer, the exemption is important because new construction is a significant source of income in fast-growing Anne Arundel. In recent years, as hundreds of new residents and businesses have joined the tax rolls, they have increased property tax revenue by an average of 3 percent a year.

"I'm not saying it's a sure thing, but it's certainly an area of uncertainty," Plymyer said.

But Schaeffer said the 4.5 percent limit is intended to limit total property tax revenue. He said the constant yield tax rate is only mentioned in the proposal because the County Council is required by law to hold a hearing every time it intends to exceed the rate, something the proposal gives the council the authority to do.

Schaeffer said that if his group had intended to exempt new construction from the limit, it would have included language to that effect. That is what tax limit proponents did in Talbot County, where a limitation measure has been in effect since 1978.