Each national economy particularly relies on the quality of its human resources. Education is a crucial factor in building human capital, ekonomičan growth, and development, thus creating a competitive advantage for the national economy. This paper explores the interrelationship between the education system and economic development at the regional, or local, level. The research aim is to analyze theoretical and practical insights into the financing of the education system by regional and local self-government. The expenditure of budgetary funds is explored and analyzed within the framework of managing educational resources, using the examples of major cities in the Republic of Croatia and the cities of the Bjelovar-Bilogora County (Bjelovar, Daruvar, Garešnica). The ultimate goal of the research is to determine the level of investment by the mentioned local self-governments in preschool and primary education and to identify necessary changes in education financing policies that would contribute to the long-term development of the quality of these systems. Public financing strategies lead to inequalities among local self-governments in terms of the amount of budgetary funds allocated, necessitating the alignment of education standards with those of the central government level. Furthermore, it is recommended that the central government increase the share of total expenditures allocated to the education system