New Hampshire Gov. Maggie Hassan has proposed a two-year budget plan that includes a 6.4% spending increase, but would also cut more than $1 billion from state agency requests.

Hassan issued her fiscal year 2016/17 spending plan proposal on Feb. 12 and emphasized that it is "far below historic averages" while also seeing new revenue sources. The $11.5 billion budget proposal involves increasing the state's tobacco tax by 21 cents, raising motor vehicle registration fees and implementing the gambling game keno. The Democratic governor said the recommended budget is $250 million lower than the state spent in 2004 when adjusted for inflation.

Hassan's fiscal plan would involve 22 state agencies not seeing any increases in their budgets accounting to over $1 billion in savings. The budget would increase funding in the state's university system from the current two-year budget cycle by $13 million and $6.5 million in community colleges.

It would also allocate $4 million to move forward with a commuter rail initiative that would connect Manchester and Nashua to Boston.

"This is a budget that helps expand opportunity for middle class families, supports job-creating businesses, encourages innovation, and aims to attract and retain more young people here in New Hampshire" said Governor Hassan in a statement. "This is a common-sense budget that invests to stem troublesome demographic trends and build a brighter economic future with more opportunity to climb the ladder of success."

Hassan's proposed budget still needs approval from the Republican-controlled New Hampshire House and Senate.

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