The article aims to present the concept of performance-based budgeting at the local government level with a focus on its importance for strategic management at the local government level. The original intention of introducing programme budgeting, which is clearly linked to performance management and results, was to improve strategic-oriented public management, in particular by focusing on objectives and using performance information as well as performance measures. Much more attention has recently been paid to the importance and use of performance information and performance measures. Based on case studies, the authors analyse the significance of the performance information provided in the newly established performance budgets of municipalities, while the findings were supplemented by a perception of the current situation in the form of semi-structured interviews with elected representatives of selected local governments. The results of the article seek to highlight the advantages of implementing this concept, the appropriate ways and obstacles often encountered, and important recommendations for improving its use, summarised on the basis of more than a decade of experience since the introduction of this budgetary innovation on the basis of legislation as mandatory budgetary policy instruments in Slovakia for all self-governing regions and local governments in municipalities with more than 2,000 inhabitants. This leads to the conclusion of whether PBB, among other approaches, is an option or a real necessity for today’s economic challenges, but at the same time to the actual need for changes in the methodology of this strategic management tool at the local government level.