Advocates of drastic new restrictions on Montgomery County's ability to adjust real estate tax rates say that when public resources get tight, governments get more efficient. "Frills" will be eliminated, they say, if funds are cut generally. And if taxes on homes are reduced, they claim the county will find other sources of revenue, such as an increase in the state revenues returned to the county. But this is fantasy -- just so much campaign rhetoric. No proof has been offered.

These anti-government people, mostly members of the group Fairness in Taxation, say that one way the county can make up revenues is if the state reverses its historic position and allows Montgomery County to impose a gasoline tax. But would we really be better off paying the same total taxes through higher gasoline taxes, parking taxes and Metro fare increases -- none of which are deductible from federal taxes?

The real problems and the real solutions lie elsewhere, within the structure of property tax assessments.

Maryland ostensibly assesses all real property based on market price and requires the county to apply the same tax rate to all homes and commercial property. The homeowner's tax bill then is the product of multiplying the state's assessed value times the county tax rate. It sounds simple: market value times uniform tax rates. But actually it's not.

First, the state assesses only one-third of the property in a county each year. In the reassessment year, the state determines the market value of the house at that time. If it is higher than the assigned value from the previous assessment, one-third of the increase is added in that year and one third for each of the next two years. Each year's tax is based on this phased-in value -- a reflection of the private market in the year of the most recent assessment.

When market prices jumped in 1988-89, assessments jumped too. The effect was that one-third of the county's homeowners saw assessments reflecting the hyped market prices, while the remainder had assessments based on the much lower previous years' market prices. And property tax bills reflected this mishmash -- one-third rose by an average of 8.8 percent, and the lowest third dropped by 5 percent.

Early on, county executive Sid Kramer warned that soaring assessments could produce an upward pressure on real estate tax bills. For that, one county newspaper called him an alarmist. But it was Kramer, not the FIT people who first went to Annapolis and helped secure the restoration of a cap on annual assessment increases. In contrast, FIT prophesied that homeowners would be driven out by tax increases -- a prediction that didn't come true -- and warned of mammoth tax bill increases even as the assessment ceiling was being restored.

Instead of pressing for an end to the three-year assessment pattern tied to a single tax rate, FIT wants a restriction on Montgomery County's tax flexibility. In fact, inequity in tax bills could be better addressed either by requiring reassessment of the entire county at the same time or by permitting different rates for different cycles. Had either of these reforms been in place this year, a uniform tax bill increase of 2 percent per home would have produced the same amount of revenue as the unequal tax bills produced.

There are better ways to protect against erratic changes in tax bills than radical changes in government. President Reagan's prediction that we could enjoy equal services with less taxes has been shown to be impossible. Montgomery County citizens should realize this and apply sound consumer advice at the polls next month when voting on amendments to the county charter. Remembering things too good to be true usually are.

-- Edmond F. Rovner is an assistant to Sid Kramer; these are his personal views.