A bill proposing a 11/2-cent increase in the State cigarette tax has been presented to the State Legislature by Boston Mayor John Collins and State Senator John Powers as a means to aid Massachusetts localities in which there are private colleges and universities.

Each of these localities would receive $100 annually for each full time student. Were this system in effect during 1963, the State would appropriate $9 million, including almost $2 million to Cambridge and nearly $4 million to Boston. According to Paul Burns, legislative assistant to Mayor Collins, the increase in the cigarette tax would provide $10 or $11 million in 1964.

The bill, which is now in the House Committee on Taxatation, is intended to alleviate financial problems of communities which must furnish municipal services to the tax-exempt educational institutions. According to Burns, the expansion of private colleges is continually diminishing local tax bases.

Support for the bill has come both from college towns across the State and from private colleges which may see in the bill an alleviation of municipal pressures on their tax exempt status. President Pusey's office has called the Collins plan "an interesting attempt to solve one particular aspect of the problem of municipal financing." The statement urged "serious consideration" of the bill.

Presenly the University pays Cambridge about $1 million yearly as a voluntary contribution in lieu of taxes.

Opposition is expected from the cigarette lobby and from non-college towns which receive no direct benefit from the higher cigarette tax.