With the city awash in cash from surging real estate transactions, Mayor Bloomberg yesterday presented a $57.1 billion preliminary city budget for fiscal 2008 that seemed designed to score him some political points even while allowing him to bill himself as a prudent fiscal steward.

The city’s $3.9 billion surplus for fiscal 2007 — which is nearly $2 billion more than City Hall was expecting just a few months ago — is allowing Mr. Bloomberg to cut taxes by $1 billion and to use $1.4 billion to plug the budget shortfall for 2009.

Despite the surging city revenues, which are being fueled by taxes from blockbuster commercial real estate sales and record Wall Street profits, Mr. Bloomberg’s tone was cautious yesterday. He stressed that the flush times could change at any moment.

“Even though it would be great to go out and blow it all in one day, that is not a very intelligent strategy,” he said.

As Mr. Bloomberg promised last week, the budget for fiscal year 2008, which starts on July 1, cuts property taxes by 5%. Yesterday’s forecasts shows budget gaps of $2.6 billion for 2009, $3.7 billion for 2010, and $3.6 billion for 2011.

In a sign Mr. Bloomberg may be more optimistic about the economy than he is letting on, his budget projections assume the property tax cut will remain in place through the end of his term, even though he has committed to it for only one year.

The new budget, which comes to about $60 billion all told when debt payments and other items are included, also stashes $500 million into a health care trust fund Mr. Bloomberg created last year for city retirees. It increases spending by about 2.6% over fiscal 2007 largely because of labor contracts with the teachers and other municipal workers.

On the capital side, it earmarks money for dozens of projects, including $350 million for the Jacob K. Javits Center, $320 million for redevelopment in Coney Island, and $205 million for the Atlantic Yards Project in Brooklyn. It also includes $28.4 billion in school construction spending through 2017, and increases subsidies for the city’s public hospital system. It assumes that Governor Spitzer will increase state education spending for the city by $1.9 billion annually.

As the nation’s economy shows signs of softening, New York City’s economy seems more solid than ever. The turnaround comes five years after the World Trade Center attack rocked the city’s economy, leaving major deficits in the budget and prompting the mayor to raise property taxes by 18.5%.

Mr. Bloomberg said his $1 billion tax cut package — which includes the property tax cut, an elimination of the city’s 4% sales tax on clothing and shoes, and a combination of tax deductions and credits for certain businesses — is a giveback to the New Yorkers who helped the city get back on its feet after its tough times. He also said the cuts were a strategic investment to keep businesses, residents, and shoppers in the five boroughs.

Charts included with his budget plan show that New York City taxes its residents far more heavily than other municipalities. Property taxes in Midtown Manhattan are higher than anywhere else in the country.

Mr. Bloomberg used that as a justification for his tax cut, but said the city must keep an eye on future expenses, including soaring pension costs and debt payments.

“All of these cities with lower taxes are trying to steal away our business, and we want those companies to stay here, and come here, and create jobs for our citizens,” the mayor said. With the economy doing so well, the mayor will undoubtedly come under pressure to cut taxes even more before the end of the budget season.

He billed his approach of balancing tax cuts with shoring up future fiscal imbalances as a “model for cities throughout the country.”

Mr. Bloomberg’s sixth budget is a departure from his past budgets. In the lead-up to his re-election campaign, his budgets were filled with politically popular items such as the $400 property tax rebate, which will continue in the coming year. Last year, despite a surplus of $3.3 billion, he resisted tax cuts in favor of paying future expenses.

This year, he’s trying a hybrid approach. The City Council must pass the budget by June 30, but the speaker of the council, Christine Quinn, has forged a close partnership with Mr. Bloomberg. As a result the budget process is expected to be smooth this year.

The president of the Citizens Budget Commission, Diana Fortuna, who last year had nothing but praise for Mr. Bloomberg, said he handled this budget “moderately well.”

The budget also asks for a menu of $553 million for various initiatives from the state and $1.1 billion from the federal government. The federal payments include $9 million for reimbursement for outstanding parking tickets from foreign dignitaries and an unspecified amount for medical compensation related the World Trade Center attacks.