ALBANY – Mayor Bloomberg wants to raise New York City’s tax on cigarettes by 50 cents, which could drive the cost of a pack past the $8 mark.

When he presents his budget at the end of the month, he will propose raising the city’s tax to $2 from $1.50. The combined city and state tax in New York City would be $3.50, the highest in the nation.

It would be the first increase since the mayor raised the tax on a pack of cigarettes by $1.42 in 2002.

The mayor, whose campaign against smoking was a defining policy of his first term, said here yesterday that the city could do more to lower the number of smokers in the city, a population that is already in steep decline. He said the city would use the money derived from the additional tax to support anti-smoking programs.

“Nobody likes taxes,” Mr. Bloomberg said. “But cigarette taxes are something different.”

He added: “It’s not a revenue source. We’re trying to save the lives of our children.” In June, the Bloomberg administration released telephone survey data that it said showed that between 2002 and 2004 – the period during which the city instituted its restaurant and bar smoking ban and imposed the tax hike – the number of New Yorkers who smoke fell by 188,000, a 15% decrease.

The mayor made public his intention to raise the city’s tax while sharply criticizing Governor Pataki’s own statewide cigarette tax plan. Mr. Bloomberg, who was in Albany yesterday to offer lawmakers his official response to the governor’s executive budget, said he was suspicious of Mr. Pataki’s plan to increase the state’s cigarette tax by $1 and have New York City lower its tax by the same amount.

Under the plan, the state would then reimburse the city for the estimated $78 million loss in revenue. In other words, according to the governor’s proposal, there would be no change in the city’s cigarette tax, but it would raise the level of the rest of the state to match what New York City smokers pay.

Accusing the governor of trying to fix something that isn’t broken, Mr. Bloomberg said he feared that the $78 million reimbursement is not guaranteed but would vanish if Albany in the future decided to lower the state tax.

“While the effect would be revenue neutral, making this change could open the door in the future to those who would like to reduce the tax at the State level,” Mr. Bloomberg said, “something that none of us should hope to see.”

His criticism of the governor’s plan was one of a number of strong objections the mayor had to the governor’s budget, which he said shortchanged the city in the areas of education and Medicaid.

While praising the governor for proposing to lift the cap on charter schools and to give poor parents $500 tuition tax credits, Mr. Bloomberg in his testimony to lawmakers argued that Mr. Pataki’s Division of Budget was relying on statistical legerdemain.

In particular, he said the city could immediately use only $64 million of the $104 million increase in general school aid to New York City that the governor proposed. The mayor said the governor committed the rest of the amount – or $40 million – to debt service.

And he objected to Mr. Pataki’s position that the city ought to use money it saved from last year’s approved cap on local Medicaid expenses on school funding. “Now we’re told to spend all the money we didn’t have to pay for Medicaid to pay for education,” Mr. Bloomberg said.

Mr. Bloomberg also lambasted the governor for not including New York City residents as part of Mr. Pataki’s plan to give $400 property tax rebates to homeowners in school districts that restrain spending.

He laid into Mr. Pataki’s plan to generate extra “sound basic” revenue – related to the Campaign for Fiscal Equity lawsuit – through gambling parlors, saying levels of school funding would be influenced by the vicissitudes of the gambling industry. Mr. Pataki proposed dedicating $375 million from the parlors to help the state comply with funding requirements for struggling school districts, with 60% of the aid going to New York City schools. Last year, the total from the parlors was $325 million.

A court-appointed panel in 2004 ruled that the state owes the city billions of dollars in additional annual funding to public schools.

Mr. Bloomberg said the most “egregious flaw” in the governor’s education funding plan was its omission of capital dollars for city schools. “These funds are desperately needed to ease overcrowding, reduce class size, and build and modernize gyms, labs, and other school facilities,” Mr. Bloomberg said. He said the city had to postpone building new schools in Sunset Park, Brooklyn, Woodhaven, Queens, and Lower Manhattan.

Mr. Pataki yesterday defended the funding levels, saying, “It’s an excellent budget and it is particularly helpful to New York City across a myriad of fronts.”