Citizens’ budget (used altemately with the term “participatory budgeting") is one of the key ways for local residents to meaningfully engage in local government processes. Since late 1980s, when first participatory budgeting projects were implemented, this form of public participation has gained popularity and wider acceptance. It translates into tangible benefits, such as collaborative city development and residents’ involvement in participatory democracy. In Poland, participatory budgeting was initiated in 2013. It was only after five years from this first edition that the Polish legislator decided to regulate the legal status of the panicipatory budget. An obligation to create annual participatory budget was introduced for large cities, i.e. above 100,000 inhabitants, also setting the guaranteed minimum of funds to be spent under the participatory budget. It has been two years since these legislative changes were made, shaping a new attitude of municipalities towards civil society participation, so it is a good time to look at the consequences of these changes, in particular at the issue of financing participatory budget schemes from municipal funds. The future of the participatory budgeting movement depends on continuous improvement of the budgeting procedure which in ttun is conditioned by legal regulations and growing citizen engagement.