Rising incomes among D.C. residents and businesses will give the District sufficient cash next year to spend an extra $21 million on social programs and to lower the property tax rate for homeowners for the first time since 1991, Chief Financial Officer Natwar M. Gandhi said yesterday.

Gandhi said he expects tax revenue to climb nearly $52 million over previous projections for the fiscal year that begins Oct. 1. In anticipation of the more optimistic numbers, the D.C. Council included provisions to lower property taxes and increase spending in budget legislation now before Congress. It also sent Gandhi instructions to implement the changes if the economy remains strong.

Gandhi did so yesterday, certifying that the city will have sufficient funds in 2006 to spend an extra $21 million on property tax relief, an additional $21 million on social programs and about $5 million on other needs, including improving the historic Lincoln Theatre on U Street NW and cleaning up a gasoline leak in the Lamond Riggs neighborhood on Washington's Northeast border.

Mayor Anthony A. Williams (D) said the new numbers prove his long-standing contention that building a healthy economy is the key to improving the lives of all District residents.

"The numbers are Exhibit No. 1 about why our city is on the right path," Williams said in a written statement. "Because of our strong and steady local economy, along with prudent management, the District's most recent budget provides for expansion of services for the city's neediest population, while also providing tax relief to homeowners across the city."

Soaring property values have left many homeowners clamoring for relief from sharply higher tax bills. Starting next spring, D.C. homeowners will pay 92 cents per $100 of assessed value, instead of 96 cents. The change will lower taxes on a $300,000 home by about $120.

In addition, Gandhi said, the city will permit property tax bills for homeowners to rise by no more than 10 percent a year instead of capping them at 12 percent, as it has in the past. And senior citizens will have their property tax liability cut in half, he said.

Poor residents also have been clamoring for help, and the extra tax revenue will permit the District to assist them, too, Gandhi said.

The city will spend an additional $5 million to reduce its waiting list for subsidized child care and $7 million on low-income housing assistance. The city will add $1 million to its budget for services to the victims of domestic violence and $2 million for substance abuse programs. And an extra $3 million will help house homeless families with children and another $3 million to fund mental health services for children in foster care.

"It's great news, because those programs were really underfunded," said council member Adrian M. Fenty (D-Ward 4), who led the drive to add the contingency spending. "This will really help poor people in the city."

Gandhi attributed the windfall to sustained economic growth in the District. "My contention is the District is on an economic roll," he said.

Unlike last year, when tourism and higher sales tax collections were credited with driving revenue higher, Gandhi said his projections are based on significantly stronger income and corporate tax collections, a sign that District residents and businesses are making more money.

Although a stronger stock market and greater capital gains are partly responsible for that increase, Gandhi said, there are also signs that the city's population is changing.

"The anecdotal evidence suggests we are getting higher-income and two-income families with a lot of money moving to the city," Gandhi said, adding that his office is studying income tax data for more information.

"It's a simple story, but it's a good story," he said. "As chief financial officer, I'm happy about it."