Montgomery County Executive Isiah Leggett broke the law when he recommended a budget that cuts benefits and blocks pay raises for police officers, a labor relations administrator has ruled.

In his decision, attorney Ira F. Jaffe said Leggett (D) must submit a revised budget proposal that reverses the salary changes, restores health and retirement benefits, and adheres to binding labor agreements.

It was the latest turn in the escalating fight between the county and its employee unions as the Leggett administration faces a $300 million budget deficit.

On Friday, hours after the ruling, Leggett’s lawyers appealed to the Circuit Court, saying the decision wrongfully delegated Leggett’s responsibilities “to an unelected labor arbitrator.”

The appeal marked the second time in a week that the county’s bitter dispute over collective bargaining made it to court. On Monday, a judge rejected another legal challenge to Leggett, saying the Municipal and County Government Employees Organization must first take its case to a labor administrator.

County police, who protested outside Leggett’s home Wednesday, have taken that step and received the answer they wanted.

Now their case jumps to the head of the line to be heard by a judge.

The ruling by Jaffe — the county’s “permanent umpire” for disputes over collective bargaining with county police — represented a broad repudiation of Leggett’s assertion that he has the power under the county’s charter to craft a spending plan in what he believes to be the public interest. After a closed hearing this month, Jaffe sent his decision to police union and county officials shortly before midnight Thursday.

“The County Executive’s actions in this case have essentially gutted the collective bargaining process mandated” by county law, Jaffe wrote. “The County Executive’s argument that he is not bound by the law and that . . . the Montgomery County Charter sanctioned his conduct is rejected.”

Police union officials said the decision confirmed what they have long believed.

“That’s what we maintained all along: that there’s a law and nobody’s above that law,” said Walt Bader, a police union leader. The ruling also calls for including in the budget funding of a 3.5 percent pay increase for most police officers, a provision not found in contracts that emerged from collective bargaining with firefighters and general government workers.

“It has nothing to do with politics. It has everything to do with process,” Bader said, adding that the decision was about compliance with longstanding law, which he said the union has done when it lost cases in the past.

The County Council has the final say on the budget.

Leggett was also ordered to stop taking “any action that directly or indirectly opposes” the funding of labor agreements with police that are at the heart of the wealthy county’s fierce debate over government spending and labor rights. He has argued that it would be irresponsible to fund the labor agreements given the budget gap and proposals to cut spending on health, libraries and other public services.

Leggett noted that another labor relations administrator had ruled in 2009 that, because of a disconnect between the collective bargaining law and the charter, Leggett did retain broad authority to craft a budget proposal.

“You had one who ruled the other way on this two years ago. Now you’ve got another one that ruled a different way,” Leggett said. “We’ll see what the court says.”

Jaffe was appointed with the agreement of Leggett and the police union to handle bargaining disputes. Andrew Strongin, the labor administrator in the previous case, was sharply criticized by fire union officials and was not reappointed.