Today, more and more attention is being paid to local communities, which are becoming an important source of infrastructure funding. Through the decentralization of the financing system, local finances are increasingly taking on responsibilities in the implementation of capital goods financing policy. Financing the communal economy is key to increasing the communal standard, however, insufficient financial resources are a limitation of realizing the full potential. Due to this problem, local governments are increasingly trying to realize the financing of local public capital goods through companies owned by local governments that are entrusted with the performance of communal activities. The paper presents a comparative analysis of the budgets of local governments of OECD countries and the cities of Primorje Gorski kotar County. The research proved the hypothesis that the system of financing the communal economy in the Republic of Croatia is not appropriate, which is reflected in the insufficient financial resources of local units required for the realization of an appropriate standard of communal services. The financing of the communal economy is crucial for economic growth, but it is not sufficiently developed, and therefore additional sources of financing are sought, which would also stimulate economic growth, and which are available to local units. In this sense, it is proposed to use as much as possible sources of funding from the private sector as well as EU grants, all with the same goal, which is to increase living standards in the local environment.