When Montgomery County's unions tried last year to defeat our referendum to hold annual property tax increases to the rate of inflation -- they used surrogates to speak for them, outspending our taxpayer's group 10 to 1. But we beat them anyway.

Now, to intimidate the county council into overriding our charter amendment, they're repeating last year's campaign, saying we'll starve the county and, inferentially, be responsible for closing libraries and firing suicide counselors.

This time the spokesmen for the unions are county councilmen Michael L. Subin and Derick P. Beriage {"Montgomery Won't Make It Without More Money," Close To Home, Jan. 27}. But their claims are confounded by the facts.

By their own calculation, holding property tax increases to the rate of inflation this year instead of jacking them up 10 percent would "cost" $28.6 million (the true figure is $18 million). But neither Subin nor Beriage said anything about the $65 million in fiscal '92 pay increases that the unions are demanding and County Executive Neal Potter says should be withheld.

Nor did they mention that, under Potter's plan, taxpayers will still face up to $115 million in new taxes at a time when our middle class is being pushed out of the county.

It's doubly ironic for Subin to call for equitable taxation when for the past four years he has voted against legislation to require developers to pay a fair share of the huge road and school needs they create. As Potter has lamented, if a development tax had been levied when first proposed, we'd have $200 million in new revenue now to absorb our projected $175 million shortfall.

The shortfall is, indeed, serious. It is also an opportunity to learn to live within our means.

We want to pay our public employees properly, but multiyear pay raises must have reasonable limits. Right now, county employees average $51,000 a year in salary and benefits -- approximately 10 percent more than in surrounding jurisdictions. The average Montgomery County teacher makes $60,176 a year in salary and benefits -- $8,909 more than in Fairfax County's excellent school system. The top teacher's pay package in Montgomery is $73,800 -- a lofty $12,511 more than in Fairfax.

To create the same ratio of employees to students in the two school systems would require Montgomery County to lay off 1,000 employees. Ironically, we have 1,549 more school employees today than we had 10 years ago, although our enrollment is the same. These are the reasons why our true cost per pupil -- counting expenditures from the school operating budget and county's general fund -- is $8,294, a shocking $1,051 more than Fairfax County's.

We've also built up duplicative services for many programs and embarked on others that make little sense -- i.e., the development of "human service profiles" that tried to match delivery of social services to the road boundaries of master land-use tracts; a series of Big Brother programs that told people to talk more at dinner, as well as how to plant flowers and manage stress; and even a program through which supervisors routinely give each other cash awards for "outstanding performance."

And Montgomery County may be the only place on earth where well-paid public employees get an extra 3.5 percent annual pay "increment" for "satisfactory performance." This, together with longevity increases, will cost the county an extra $41 million this year.

Our homeowners and apartment dwellers pay 80 percent of the county's bills. We want the waste cut from government and, inevitably, that means people. We want fairness in taxation -- and that means levying a development tax and, if needed, one on commercial parking spaces.

We can keep our middle class only if we hold increases in property taxation to the rate of inflation or less. We believe most members of the county council understand this and will abide by the Question F amendment we voted into the charter last November. -- Robert Denny is chairman of Fairness in Taxation.