Regional and local self-government represent a living environment that should provide all services and jobs that are considered essential in order to enable the survival of the population in the areas of the units. Local and regional self-government is increasingly presented as an economic and managerial problem, rather than as a civilizational asset and value. With the new amendments to the Act, the local and regional self-governments are left with fewer and fewer sources of financing, and the public's expectation is that the selfgovernment should use them primarily to stimulate economic development as well as to provide various supports in the form of financial assistance. The biggest problem today is the uneven development of local and regional self-government, it is not uncommon for cities and counties with the largest surface area to have the smallest number of inhabitants, which is specifically the case of Lika-Senj County and the town of Gospić. Following on from the above fact, it is quite logical that a smaller number of inhabitants means a smaller amount of public revenue at the disposal of the local and regional self-government unit, but in addition to this, the problem is also the entrusted tasks that the unit must perform according to its competence, and the performance of which brings the unit into financial difficulties regarding the amount of income. The proposal and amendments to the Law on Local and Regional Self-Government seek to introduce certain changes that would mean significant savings for local and regional self-government units and help their development, the effects of which are discussed in the paper.