New Yorkers will learn a lot more about what Mayor Bloomberg’s soaring State of the City speech means for them when he submits his budget next week – and the most important thing to watch will be what he will say in respect of taxes. The mayor had barely been sworn in for his second term when he violated his most basic campaign pledge against tax increases, pressing for a hike in excise on cigarettes and feuding with Governor Pataki over who’s going to get the cigarette excise the city and state do collect, even while saying taxes on cigarettes are not about the money. It was the second time the mayor followed an inauguration by violating a campaign pledge not to raise taxes.

Nonetheless, we enjoyed seeing the mayor in such high spirits and so full of ideas. Some may be nanny-statish, like seeking a registry of individuals convicted of gun crimes and documenting the blood sugar levels of New Yorkers to track diabetes. This is not surprising from a mayor who’s basically let his public health department be run along Marxist principles. We’re still not convinced by his effort to drive a private developer, Larry Silverstein, out of his freely acquired rights in ground zero. The mayor, however, makes up for a lot with his vow to start pressing for public pension reform in the city.

This is the instinct of a smart man who understands what is happening in the wider sphere of business and economic policy around the country. It essentially ups the political ante as the transit workers and the Metropolitan Transportation Authority begin trying for a second time to gain a contract in negotiations in which this issue is a central point. It also comes as the mayor is seeking greater impact on the MTA board. The way he’s talking, we’d be happy to see the governor yield to him – though the smart move is to reserve judgment until his budget comes in with more clues as to what he’s going to do with taxes and incentives for people to work, business to invest, and government to get out of the way.