How Are Police Departments Funded?

Police budgets represent a part of public spending for law and order. This broad category includes prisons, jails, corrections expenditures, judicial spending, and court costs, which pay for public defenders and district attorney fees. Local governments budget for these resources but may acquire state or federal funding.

History of the Police System

The first police department in America, modeled on the London Metropolitan Police, was established in New York City in 1845 as a response to middle-class frustration over local crime rates. President Herbert Hoover’s 1929 National Commission on Law Observance and Enforcement, the Wickersham Commission, established the first national survey on law and order in response to soaring crime rates during Prohibition and raised questions over whether policing precincts should be tied to political jurisdictions.

The commission viewed local political control over the criminal justice system as corruptable and some aspects of policing moved under the control of state governments. Policing responsibilities for any area often overlap. Municipal police, state police, county sheriffs, and county police may have jurisdiction. Teams may include Native American tribal police forces and police affiliated with universities and public transit.

The U.S. Bureau of Justice Statistics publishes data on justice-related expenditures. In its most recent data from 2020, local police departments account for most government-allocated policing funds. The BJS reported over 14,700 federal, state, and local police departments. While these departments can vary in size, from nearly 44,000 officers to one officer, most are local departments with 10 or fewer officers. Most local departments have jurisdiction over areas with fewer than 10,000 residents.

Local and State Spending

Figures from the U.S. Census of Governments indicate that state and local governments spent $135 billion on police in 2021, its most recent survey. They spent another $139 billion on courts and corrections. Police expenditures have accounted for less than 4% of local and state budgets since the 1970s, but budgets have grown considerably in recent decades.

Police budgets grew from $47 billion to $135 billion from 1977 to 2021, according to an Urban Institute analysis of U.S. Census Bureau data. In 2021, 96% of police and 98% of court spending at the state and local levels went toward salaries and benefits.

• Local Spending: In 2021, nearly 87% of police funding came from local governments. Police budgets can differ drastically by place. In 2022, Los Angeles allocated $1.76 billion of its budget to policing. In contrast, San Francisco spent only $761.9 million. In 2024, Philadelphia Mayor Cherelle Parker committed $150 million of the city's $6.29 billion budget to public safety to support grants for community-based victim advocate and anti-violence work, the Citizens Police Oversight Commission, 200 new police cars, and 400 additional police officers.
• State Spending: Police spending by state governments in 2021, mostly funding highway patrols, represented about 1% of direct expenditures. By contrast, it represented 13% of direct spending at the municipal level, 10% for townships, and 8% for counties. State governments spend more on corrections than local governments, and the level of spending is about even on courts. In 2024, the U.S. Justice Department enhanced state programs and awarded $4 billion in grant money to support community safety. Over 3,800 grants support public safety efforts, address victimization, reduce recidivism, and strengthen bonds between law enforcement and citizens.
  

Federal Funding

The Violent Crime Control and Law Enforcement Act of 1994 increased federal funding for the Border Patrol, Immigration and Naturalization Service, and state and local programs. Violent crime rates fell by half, and property crime fell by 59% between 1993 and 2022, according to data by the Pew Research Center. Between 2016 and 2020, most federal police worked for U.S. Customs and Border Protection, the Federal Bureau of Prisons, the FBI, or ICE.

The aftermath of riots following the fatal shooting of unarmed teenager Michael Brown in Ferguson, Missouri in 2014 focused the public's attention on federal programs 1033 and 1122. These programs move equipment from the military to local law enforcement to help execute the wars on terror and drugs.

The Defense Logistics Agency manages 1033 and has transferred $7.6 billion in assets to 8,200 federal, state, and local law enforcement agencies across 49 states and four U.S. territories. Program 1122, under the National Defense Authorization Act, helps local law enforcement acquire military equipment at a discounted rate for anti-drug policing. The Department of Justice’s fiscal year 2023 budget was $37.48 billion. Of that, 54.8% went to law enforcement, and 28.8% went to prisons and detention.

The Bottom Line

The first police department in the U.S. was established in New York City in 1845. Policing responsibilities often overlap and municipal, state, and county police may combine forces in one area. Local jurisdictions budget for police, but also obtain funding from state or federal funding or grants.