Presenting a budget that she repeatedly acknowledged was full of difficult decisions, Connecticut Gov. M. Jodi Rell released a proposal yesterday that included spending cuts and tax increases on gas, cigarettes and alcohol. The Republican governor’s budget was received coolly by Democratic New Haven leaders, who questioned her spending choices as well as her decision not to implement more progressive taxes.

During the days and weeks leading up to yesterday’s announcement, Rell had already sent out a series of press releases introducing most of the new spending initiatives in her plan — funding for laptop computers in high schools, early childhood education, improvements in veterans’ benefits, a tuition freeze at state universities and $20 million for stem cell research — leaving most of the bad news about spending cuts and tax hikes for yesterday’s announcement.

“The truth is we cannot afford to pay for every program and every service we should provide,” Rell said. “I tried to seek a balance. A balance between what we would like to do and what we can do. In short, I did what every family does when it comes to paying bills and making spending decisions. I set priorities.”

Saying she had to close a $1.2 billion budget hole, Rell proposed a 74-cent-per-pack tax increase on cigarettes, a 15 percent increase in alcohol taxes and a total gas tax increase of six cents spread over the next eight years.

The governor’s budget included a substantial focus on transportation issues, including a $667 million investment for 342 new cars to be added on the New Haven to New York rail line. But her budget also proposed a surcharge of a dollar on all tickets on the line, beginning in 2008. Proceeds from the surcharge would be used only to fund improvements to the line.

Rell explicitly mentioned Tweed-New Haven Airport in her speech, saying she would work to bring in new carriers.

New Haven Economic Development Administrator Henry Fernandez said that he appreciated the mention of Tweed but criticized the train ticket surcharge and said the governor’s proposal would not do enough to facilitate public transportation.

“It may improve the quality of service, but it will discourage people from using it because it is becoming so expensive,” he said.

New Haven Public Information Director Derek Slap said that Mayor John DeStefano Jr. was still reviewing the budget proposal and could not comment on it in detail. But Slap said the mayor, who is also currently running for governor, was disappointed with Rell’s proposal overall.

With regard to the investment in transportation infrastructure, Slap said the mayor believed that the governor’s proposal was inadequate relative to investments made in other states. He also said the mayor was concerned about the lack of funding for the New Haven to Springfield commuter rail line.

Rell spokesman Rich Harris countered that, despite years of talk about improving the state’s transportation infrastructure, the governor was the first to take action, just seven months after taking office.

Rell’s proposal also decreases funding for the state Commission on Culture and Tourism, including cuts for the New Haven Festival of Arts and Ideas and the New Haven Arts Council. Slap said New Haven received significantly less funding for the arts than the city had requested, and Fernandez was also critical.

“This is going to hit the city of New Haven harder than anywhere else because we simply have more arts,” Fernandez said.

Rell also introduced several measures directed at fostering job growth. Her budget would allocate money for loan forgiveness and assistance to people pursuing professions in “shortage areas” like nursing and teaching. In addition, it would provide $3 million for a fund to retrain laid-off workers and $2.5 million for job creation and training programs.

But Slap said DeStefano felt the governor’s efforts at fostering job growth were insufficient.

“The mayor feels like Rell’s budget does nothing to create jobs in the state and at the very most keeps the status quo or brings up to date some infrastructure that we have as far as transportation,” Slap said.

In addition, Slap said the mayor was critical of the governor’s tax proposals because they would most significantly impact the working class. Slap said that the mayor was not necessarily opposed to a gas tax but would prefer for the governor to have addressed property tax reform.

“The gas tax is regressive, and the gas tax makes it harder on working class people to get to work,” Slap said. “The mayor thinks instead of talking about property tax relief, which [Rell] kind of dismisses, that there needs to be property tax reform.”

Ward 1 Alderman Ben Healey ’04 said he was concerned about the impact of the state budget, given cuts New Haven is also going to see in its own budget, as well as in federal funding under the budget recently released by President George W. Bush ’68.

“The increase in the gasoline tax, while certainly a good thing from the environmental point of view, when coupled for a lot of people in the city with an upcoming property tax increase will make the budget all the harder for New Haveners to bear,” Healey said.

Fernandez questioned whether the gasoline tax would even have an environmental benefit.

“Generally, people will say the gas tax will help from a conservation perspective, but this only works if people are provided with sufficient public transportation options,” he said.

Harris said that the governor’s proposed tax increases are designed to allocate the tax burden to users of services. He said the cigarette tax was fair because the state was experiencing a significant increase in health-related expenditures, and smoking is a leading cause of preventable illness. He said proceeds from the gas tax would be used to fund transportation improvements, and the Metro North surcharge would be used only for rail improvements.

“The governor’s plan for transportation shares this burden fairly among the people who will be using these improvements,” Harris said. “For every $1 they pay, they’re getting $1 back in tangible benefit.”

Harris said the impact of the alcohol tax on consumers would be negligible, amounting to roughly two cents on the price of a six-pack of beer.