Montgomery County Council President Isiah Leggett yesterday proposed a sharply scaled back version of living-wage legislation that would affect far fewer low-paying jobs and give companies more time to boost salaries.

Leggett (D-At Large) has been working behind the scenes to salvage the legislation, which has run into opposition from County Executive Douglas M. Duncan (D). Duncan says the measure could hurt the local economy by making it too costly for many private firms to do business with the county.

As originally proposed, it would require most companies that receive county contracts or economic incentives to pay employees at least $10.44 an hour, more than double the current minimum wage.

After canvassing council members, Leggett proposed removing the bill's most controversial element--the part applying to companies that receive economic incentives--in an effort to find a council majority to support it. As it stands, that provision would affect an estimated 5,000 low-wage jobs in Montgomery.

In addition, Leggett's compromise would require only companies with contracts of $100,000 or more to pay employees a living wage, double the original threshold. If enacted, those changes would mean only several hundred workers would receive raises.

About 1,600 businesses hold county contracts, but only a fraction would be affected by the bill in its new form. Leggett's proposal would give those companies three years to raise minimum salaries to $11 an hour without benefits. He also proposed changing the bill's name to "the contract equity bill."

"I'm not sure you have an overwhelming majority in favor of the bill with these proposals, but I would tend to think that if it is to be successful, it would be along these lines," said Leggett. "The council members I've talked to definitely feel more comfortable with this approach."

In his memo to council members outlining his recommended changes, Leggett tacitly endorsed Duncan's recent substitute for the living-wage bill, a proposed $11 million package of income tax credits. Leggett urged council members to pass "as many of these initiatives as our resources will reasonably permit."

Duncan proposed making Montgomery the first county in the nation to provide poor working families an earned income tax credit. He estimates that his plan would affect 13,600 county families that make less than $17,000 a year, more than would be affected by either version of the living-wage bill.

"I think my package is much more effective and much more targeted," Duncan said yesterday. "I'm pleased [Leggett] is proposing it. This appears to be much more responsible."

Living-wage supporters, a collection of community groups, churches and labor unions, say their proposal would provide families with larger raises and establish an important precedent for using government's financial clout to help poor residents. But even the bill's primary sponsor, Council member Philip Andrews (D-Rockville), said Leggett's proposals may be the best way to pass the measure in any form.

"The key is that this would establish the principle of the living wage in county law, and that is a major change," Andrews said. "I wanted it to go farther. But I'm reasonable person, and I know that it takes five votes to pass a bill."

CAPTION: County Council President Isiah Leggett is behind the scaled-down version of the proposal.