As part of the new tax measures that will enter into force on January 1, 2024, the Government of the Republic of Croatia has adopted a decision on the measure to abolish the surtax on income tax. Given that the share of the surtax on income tax is projected to be 5% to 8% of total revenues at the level of the cities of the Republic of Croatia, the aforementioned represents a significant loss of revenue for the cities. From these revenues, local self-government units also finance public services that serve the well-being of residents and invest in projects that serve to increase the quality of life of residents. The aim of this paper was to investigate the impact of the measure of abolition of the surtax on the policy of public revenues and expenditures of the cities of the Republic of Croatia. For this purpose, a survey questionnaire was conducted in the period from June 22 to August 28, 2023, which was completed by 46 representatives of the cities of the Republic of Croatia. The survey results showed that about 35% of respondents have neither a positive nor a negative attitude regarding the effects of the measure of abolishing the surtax on income tax, while 50% of them believe that the abolition has a negative impact. The respondents believe that the measure of abolishing the surtax on the income tax will reduce the income of the cities and that it will not result in an increase in wages. The cities primarily intend to compensate for the loss of said income by increasing the income tax rate. In addition, certain cities have declared that they will compensate for the loss of the surtax by increasing the tax on vacation homes, by increasing administrative and administrative fees, by increasing the administrative and administrative fee. Certain cities have announced an increase in the debt of municipal units. Finally, respondents do not believe that this measure will encourage population migration.