Montgomery County officials told the County Council on Tuesday that agencies would have to take about a 1 percent cut in funding to balance the operating budget for the fiscal year that will begin July 1.

But council members also heard from their own analysts that County Executive Isiah Leggett (D) would probably propose a modest increase in spending when he releases his proposed fiscal 2015 budget in March.

Such is the nature of fiscal forecasts, snapshots that can look quite different, depending on who’s doing the shooting.

Jennifer Hughes, Leggett’s budget director, said that based on projected tax revenue and existing spending commitments, the council would need an additional $168 million to balance a nearly $5 billion operating budget for fiscal 2015. That’s an improvement over her forecast in June, when she described a $300 million gap between revenue and expenditures. It’s also a far cry from the massive gaps that opened up in the recent past as a result of the recession.

Hughes attributed the improved outlook to an unusual surge of income tax receipts in November. They include payments from taxpayers who received filing extensions earlier in the year. A rebounding real estate market also bumped up transfer and recordation tax collections.

But Hughes said the county was lowering revenue estimates by $85 million because of losses that could result from a major Maryland tax case pending in the courts. The state Court of Appeals ruled in January that Maryland must offer a credit to taxpayers who earn certain forms of income in other states. The court said Maryland’s failure to offer the credit violates the commerce clause of the U.S. Constitution. State Attorney General Douglas F. Gansler (D) has appealed to the U.S. Supreme Court, which has not said whether it will hear the matter.

At the same time, the county will be required to increase the school budget by an estimated $25.3 million under the state “maintenance of effort” law, which requires that schools receive, at a minimum, the same rate of per-pupil funding as in the previous year.

Montgomery is also on the hook for $3.3 million in teacher pension costs shifted to the local level by the state.

Although the overall picture has improved, Hughes said in her memo to the council that a “challenging fiscal environment remains.”

There are, however, potential funding sources that have not yet been factored into Leggett’s analysis. For instance, the books have yet to close officially on fiscal 2013, which ended June 30. And expenditures from the current fiscal year could come in under projection.

In addition, Leggett has yet to decide funding for capital improvements and debt service, all part of the budgetary considerations that will go into his March proposal. It is also considered highly unlikely that Leggett will produce an austerity budget with a June primary drawing closer.

“The Executive’s recommended budget in March will almost certainly show a moderate increase,” council staff administrator Stephen Farber wrote in a memo to the council.

The biggest point of contention, as was true last year, will be school funding. Superintendent Joshua P. Starr pressed the council last winter for $10 million more than required for “maintenance of effort.” The council eventually followed Leggett’s recommendation that the school system extract the $10 million from its own cash reserves.

School officials are scheduled to release their fiscal 2015 budget proposal Thursday. Council members said they expected the system to ask for $27 million to $28 million over maintenance of effort.