CONCORD, N.H. – New Hampshire Gov. John Lynch wants to increase the state’s cigarette tax 25 cents per pack and cut a discount retailers receive for wine purchased from the state, the Associated Press reports.

Lynch unveiled the measures as part of his overall plan to solve an estimated $225 million revenue deficit in the state’s two-year budget. His plan slashes spending by $125 million, increase revenue by $40 and borrows $80 to fund the state’s share of school construction costs currently paid with cash.

“New Hampshire, like states across the nation, is being impacted by the slowdown in the national economy,” said Lynch. “We know our families are feeling the impact, and so is state government.”

Lynch said that his proposed cigarette tax hike, from $1.08 to $1.33 per pack, would generate $22 million. He said that with Massachusetts and Maine considering their own cigarette tax hikes, New Hampshire’s cigarette prices would still be attractive even with a tax hike. In each of the past two budgets, Lynch okayed 28-cent cigarette tax increases.

Lynch’s proposal also cuts the 20 percent discount given to outlets that purchase wine from New Hampshire to 10 percent. The revision would save the state approximately $10 million. The discount originally benefited small stores, but today, 90 percent of the wine sold is by 21 large retailers.

Republicans said reducing the wine discount would hurt small businesses. Rep. David Hess, deputy House Republican leader, said a reduction in the wine discount would hurt small businesses.