The budget, as a fundamental financial-legal act, plans and executes the spending of public funds. It is adopted for a period of one year and is proposed and approved by the representative body. Budget certain budgetary processes and principles should be adhered to, and most importantly, budgetary principle, the principle of budget balance, which requires that revenues and expenditures must be, stands out balanced, that is, there should be no budget surplus or deficit. In Republic of Croatia the budget is prescribed by the Budget Act and it is reflected in lower-level legal acts (unit of local and regional self-government), that is, in the case of the city of Rab, the budget is prescribed Statute of the city of Rab. The mayor of Rab proposes the budget, while the City Council proposes it approves. The aim of the research of this paper is to determine whether in the case of the budget of the city of Rab they are respected budget principles, and how successful is the budget planning for the observed period of 2017- in 2020. By analyzing the budget for the period 2017-2020. year, it is evident that the city of Rab has problems primarily with covering their expenses from income, that is, during the observed period period due to the growing gap between income and expenditure, but also due to the deficit of previous years there is an accumulation of losses. Furthermore, the analysis of the planned and executed budget shows that how the city of Rab relatively unsuccessfully plans its income and expenses because in none of the observed In 2008, large income and expenditure items were not balanced with the plan. The costs are in in the observed period fell to a lesser extent than revenues, and there was an accumulation of budget funds deficit that is not planned to be solved by development programs in the coming period because none the development program does not imply greater employment or an increase in other incomes