New Mexico – A Senate leader is proposing a new type of state bond that could help in balancing the budget without big tax increases.
Majority Leader Michael Sanchez, a Belen Democrat, introduced legislation Tuesday for issuing up to $500 million in short-term revenue bonds, which would be purchased as an investment by New Mexico's permanent funds.
The bonds and interest are paid back with a share of tax money that flows into the state's main budget account.
The proposal could provide some relief for legislators considering spending cuts and hefty tax increases to plug a budget gap. There is a trade-off, however.
Diverting a portion of future revenues to repay bonds will mean less money available in coming years to spend on education and public services.
Copyright 2010 The Associated Press.