UPDATE 2-Mexico places 32 bln pesos of oil-backed bonds

* Mexico sells 32 bln pesos in bonds backed by oil revs

* Mexico's recession causes drop fiscal revenues (Adds quote, background, byline)

By Michael O'Boyle

MEXICO CITY, Sept 14 (Reuters) - Mexico placed 32 billion pesos ($2.4 billion) of bonds backed by oil revenues to raise financing for state governments hit by the recession this year, Finance Minister Agustin Carstens said on Monday.

Carstens told reporters the 13-year bonds, bought by local banks, were backed up by Mexico's oil stabilization fund, which is made up of surplus fiscal revenue from crude exports.

"We managed to place 32 billion pesos, which is a lot more than the 26 billion originally considered," Carstens said.

A deep recession in Mexico has led to lower fiscal revenues for the federal and state governments.

To boost government income, President Felipe Calderon has proposed a 2010 budget that would raise taxes and widen the tax base, but opposition legislators he needs the support of say higher taxes will slow the economy's recovery.

"We have to find alternatives ... to the drop in income that we are definitely going to see next year," said Jose Reyes Baeza, governor of the northern state of Chihuahua and a member of opposition Institutional Revolutionary Party.

Ratings agencies have threatened to downgrade Mexico's investment-grade debt rating if it does not reduce its dependence on oil, which funds over a third of the federal budget and has long served as a crutch for the country's weak tax system.

Mexican tax collection is among the lowest in Latin America. ($1 = 13.365 pesos) (Reporting by Michael O'Boyle; editing by Carol Bishopric)