This final paper analyzes the consequences of not adopting the state budget, with special emphasis on the example of the town of Gospić. The state budget is a key document that defines the expected revenues and the method of distribution of funds for public services and projects, and its timely adoption is of vital importance for the stability and development of local communities. The paper touches on several key frameworks. Relevant laws and regulations regulating the budget in the Republic of Croatia are described, including the Budget Act, the State Budget Execution Act, and the Local Self-Government Act. The basic functions of the budget and its structure, including revenues and expenditures, were investigated. The process of adopting the budget and the reasons why it may not be adopted are explained, such as political disagreements, economic circumstances and procedural errors. The paper analyzes the legal, economic and political consequences resulting from the non-adoption of the budget. In the case of the town of Gospić, specific examples from the past are given to illustrate the negative effects on the local community.