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Montgomery County Council members gave preliminary approval Thursday to the first spending reduction since the county's charter was approved four decades ago.

The $4.27 billion fiscal 2011 operating budget includes several new tax increases, as many as 90 layoffs of government employees and an average of five furlough days for most government workers.

The budget represents a 3.8 percent reduction in spending from 2010, and filled a $1 billion shortfall.

Montgomery County Executive Isiah Leggett (D) and council members will take that news and a plan to restore reserves to 6 percent of their general fund to New York next week as they fight to maintain the county's AAA bond rating — which the agencies have said is in jeopardy.

The county's policy now is to have a reserve fund of 5 percent.

The council approved a furlough plan Thursday that forces higher-paid employees to take more days of unpaid leave. Under the plan, all county government employees making less than $50,000 will take three furlough days; those making between $50,000 and $100,000 will take five days; and those making more than $100,000 will take eight.

Council staff said the average county employee will be furloughed five days.

Council members and Leggett also will take furloughs. Based on their pay, all council members, who make $94,351 annually, will take five days of furloughs. Council President Nancy M. Floreen, who earns a salary of $104,022, would take eight days, but the council elects a new president in December.

Based on that difference, Floreen (D-At large) of Garrett Park and the new council president likely would each have their salaries reduced by the equivalent of six-and-a-half days.

Leggett, who earns $175,000 annually, will be furloughed for eight days.

"While furloughs are certainly not desirable, they are better than the alternative of more layoffs," Councilman Philip M. Andrews said.

Leggett's original budget proposal included 240 layoffs, but 85 county employees have taken a retirement incentive package that offered a one-time payout of $30,000 and other benefits, said county spokesman Patrick K. Lacefield. Another 45 have elected for a discontinued service retirement plan for employees who have worked for the county for at least 10 years.

"My recommended operating budget for the coming fiscal year included many difficult choices and continues the work that I began three years ago of putting the county's fiscal house in order," Leggett said in a statement. "I'm pleased that the council approved 99 percent of what was originally recommended."

Leggett said 83 percent of the county's $1 billion shortfall was filled with spending reductions and other measures.

Floreen said the county would be "leaner for the foreseeable future."

In a straw vote Thursday, Andrews (D-Dist. 3) of Gaithersburg and Councilman Michael J. Knapp (D-Dist. 2) of Germantown said they intended not to vote for the county's operating budget.

Knapp called the budget Leggett proposed "irresponsible," and said it did not respond to the county's current fiscal crisis. He said it relied too much on furloughs and new taxes and fees — not cuts and a reorganization of county government.

Andrews said he would vote against the budget when the council takes its final action Thursday because of its reliance on $13 million from ambulance fees and an increased energy tax.

"I think the revenue methods are flawed and will need to be revisited in the near future," he said.

Council members acknowledged the difficulty of cutting many programs and services in an election year.

The spending plan cuts the budgets for libraries and transportation each by about one-fourth, and reduces about 15 percent from parks and planning, 15 percent from recreation, about 10 percent from Health and Human Services and 8 percent from transit services.

The county's fire and rescue service also will take about a 3 percent cut, while police are losing about 5 percent of their funding.

"I can say that we've taken very politically unpopular positions in an election year," said Councilwoman Nancy Navarro (D-Dist. 4) of Silver Spring. "It's been extraordinary to watch."

She said those council members who were unsatisfied with the budget had time to work for change before casting a vote.

The council also voted to cut $24.4 million from the school system's budget beyond the $137 million recommended by Leggett. The attempt to take more from the school system caused the system to threaten a lawsuit and brought relations between the council and the school system to arguably their lowest levels.

Council Vice President Valerie Ervin (D-Dist. 5) of Silver Spring addressed the issue Thursday, saying, "We must work together to repair any damage to our working relationship that occurred over the last several weeks."

The school system will not furlough its employees, officials have said — an issue that council members also raised.

Councilman George L. Leventhal (D-At large) of Takoma Park questioned whether schools Superintendent Jerry D. Weast would take a voluntary furlough.

When asked to respond, Weast said, "Everybody has an opinion."