State budget negotiations are set to begin now that the governor has unveiled her budget proposal for next year, with officials in cities, counties and towns waiting to find out what it means for them.

The governor's proposal, released last month, included several areas of state government on which she would like to spend more money, including Child Protective Services. It also included changes to the state sales tax formula and structure.

Officials from cities and counties have complained for years that lawmakers took money from local coffers to balance the state budget. This year's outlook for local governments that depend on state revenue may not be much better than last year, but deeper cuts are not proposed.

One issue during the past several years is the state's "sweeping" of transportation funds, said Ramón Valadez, Pima County supervisor and former state lawmaker. That's the term used for a long-running state practice to divert transportation funding from local governments to instead pay for other state services, notably the Department of Public Safety

"Those monies are directly pothole monies, repair monies for streets," he said.

But the local transportation funding gap is about more than just money the counties and cities don't receive, he said. Transportation budgets are largely paid for with a tax on gasoline sold at the pump. Newer, more fuel efficient vehicles and alternative energy vehicles don't take as much fuel, so drivers aren't paying as much, or in some cases aren't paying any gas taxes, though those vehicles still use local roads and contribute to the wear and tear on them, he said.

The state has also shifted some of its former duties to cities and counties, Valadez said.

"Not only have we received less money, we're asked to do more with what was generally considered state responsibility," Valadez said.

The governor and state lawmakers must negotiate an agreement on spending before the state budget is finalized and local governments know what they will get from it under state revenue sharing formulas.