This paper focuses on the local self-government units in the Republic of Croatia and aspects of their funding. Budget is the basic financial act passed by the representative body of the local self-government unit on the proposal of the executive body. This paper focuses on the process of adopting the budget and its components. If the budget is not adopted, legal provisions define the procedure for resolving the situation that arises. Budget transparency is a legal obligation. However, lately it has also become an imperative for good management of the local unit. Publicizing the results of the transparency survey should serve as an encouragement to the units to keep publishing all relevant documents. The most important and the most profitable budget revenues are taxes. Therefore, this paper also focuses on the income taxes and variations in the distribution of taxes that help the financially weaker units, as well as legal changes to local taxes that came into force during 2017 and 2018. An important part of the budget revenues of the smaller local self-government units are donations from the state budget as well as the co-financing of the capital projects by the European Union. The end of the paper raises the question of the sustainability of the local self-government units and the need for conducting a thorough decentralisation, which should be an important factor in their empowerment.