RALEIGH, N.C. -- In the final budget of his eight years in office, Gov. Mike Easley proposed Monday to raise the state's taxes on alcohol and cigarettes to pay for hefty raises for public school teachers and the state's struggling effort to reform mental health care.

Under a $21.5 billion spending plan introduced on the eve of the General Assembly's return to Raleigh, Easley said he wants to raise the tax on cigarettes from 35 cents per pack to 55 cents. The proposed alcohol tax increase would equal an extra 4 cents on a can of beer and 3 cents on the common 750-milliliter bottle of wine. The beer and wine tax has not been changed in more than 25 years.

"Things are getting a little bit tighter in this economy," Easley said Monday. The cuts and revenue are needed, he said, "to accomplish what we need to do in education and to care for the least among us."

The increase would raise about $100 million to help pay for teacher raises averaging 7 percent. If approved, the tax would remain less than half the current national average of $1.14 per pack. Higher taxes on beer, wine and liquor would generate $66 million next year for mental health needs.

The plan is an adjustment to the second year of the state's two-year budget passed last year. It also calls for phasing out a $172 million annual transfer from the state's Highway Trust Fund to the general operating fund, creates a sales tax holiday on energy-efficient appliances and a more than $650 million increase in education spending.

The state expects a $150 million revenue surplus, so Easley balances the budget with the new taxes and nearly $400 million in spending cuts, more than half of which come from lowering Medicaid spending forecasts and freezes on medical provider reimbursements.

Budget-writers in the Legislature have been working for weeks on their adjusted second-year budget, which they want to present to Easley for his signature by the time the new budget year begins July 1.

State employees besides teachers only would see raises of 1.5 percent, in keeping with Easley's preference to differentiate between teachers and rank-and-file employees. Non-teachers would also get a one-time bonus of $1,000.

Easley pledged in 2005 to raise the average teacher salary above the national average in four years.

"We just didn't see any way to get there without some revenue increase," Easley said.

Sherri Strickland, vice president of the N.C. Association of Educators, said she believed the general public and lawmakers would be willing to support a small cigarette tax increase to find "money for recruiting and retaining our teachers in North Carolina."

But legislative leaders have said there is not much appetite to raise taxes or fees in an election year.

"I'm not sure where we'll go with these taxes," Sen. Linda Garrou, D-Forsyth, a co-chair of the Senate Appropriations Committee, adding that raising cigarette taxes may lead to fewer smokers, and thus a declining amount of money. "I believe we need to be careful."

However, Senate leader Marc Basnight, D-Dare, has supported raising alcohol taxes to pay for mental health needs in previous years.

"It's not a significant amount of money to the consumer but it is a significant amount of help to the mentally ill," Easley said.

Easley also wants more than $700 million in new construction projects for state government, of which $550 million would be paid for with new debt.

The budget proposal plans offers no statewide referendum for road-building or university construction, as some lawmakers and outside groups are seeking this session. But Easley does recommend a $25 million reduction in the annual transfer from the general operating fund to the Highway Trust Fund.

Easley's budget also:

• Spends $39.8 million to increase enrollment in Easley's More at Four preschool initiative to 35,000 students, an increase of 6,345.

• Give $6.6 million to expand the Learn and Earn program, which lets high school students take college courses, to another 16 schools.

• Spends $11 million to carry out recommendations of a university campus safety task force formed after the Virginia Tech shootings of April 2007.