NM considers short-term bonds to close deficit

SANTA FE, N.M. (AP) _ Gov. Bill Richardson has turned to "sponge bonds'' to help fix New Mexico's budget problems without a tax increase. The governor proposes to issue $135 million in short-term severance tax notes _ called sponge bonds _ to partly offset a more than $400 million budget deficit. But the proposal has run into trouble with legislators. They object to using the bonds to pay for day-to-day operating expenses of state government and say the governor's proposal will reduce the financing available for new capital improvements across the state. Traditionally in New Mexico, bonds have financed bricks and mortar projects such as construction of schools, parks, office buildings and roads.