City Council members are upset with Mayor Bloomberg’s refusal to further cut taxes, now that it’s been determined New York is pulling in $1.3 billion in new revenues that weren’t anticipated earlier this year.

Members of the council’s Finance Committee dispute Mr. Bloomberg’s declaration that the city’s $59 billion budget now has a $4.4 billion surplus, saying it is actually somewhere between $5 billion and $7 billion. They said the budget should include deeper tax cuts.

“I don’t think the administration really appreciates the rising costs the middle class really faces,” Council Member Michael McMahon of Staten Island said. He wants some of the tax increases introduced in 2002 to be rolled back, he said.

Mr. Bloomberg ‘s budget includes $1.25 billion in cuts to business, property, and sales taxes. These include cutting property taxes by 5%, extending a $400 property tax rebate for homeowners, and ending the city’s sale tax on clothing and shoes.

He plans to use the $4.4 billion surplus to help close $10 billion in budget gaps projected for the coming years.

“We have to take steps now to make sure that this city doesn’t slip back to where we were before,” Mr. Bloomberg said during his budget presentation at City Hall yesterday. “We are not going to squander our good fortune on politically popular giveaways that will jeopardize our future.”

City agencies were asked to cut their budgets by 1.5% this year and 4% next year, yielding $729 million in savings that the city is using to fund new initiatives, such as providing bulletproof vests for auxiliary police officers. The rest will go toward the mayor’s environmental sustainability plan.

The city’s 10-year capital plan calls for $83 billion to be invested in New York’s infrastructure.

The executive budget did not include the $300 renters tax credit Speaker Christine Quinn proposed.