How Are Police Departments Funded?

Police budgets represent a part of public spending related to law and order. This broad category of spending would also include spending on prisons and jails or corrections expenditures. It also includes judicial spending or court expenditures, which pay for public defenders and district attorney fees. But who funds police budgets? The majority of funding comes from local governments.

Local and State Spending

Figures from the U.S. Census of Governments indicate that state and local governments together spent $135 billion on police in 2021. They spent another $139 billion on courts and corrections. As such, this is one of the biggest expenses for local governments. The money goes almost entirely to operational costs.

Police expenditures have accounted for a little less than 4% of local and state budgets since the 1970s. Although they represent a relatively consistent share of public budgets by percentage, the dollar amounts of policing budgets have grown considerably over the past few decades.

Between 1977 and 2021, police budgets grew from $47 billion to $135 billion, according to an Urban Institute analysis of U.S. Census Bureau data. Corrections and court spending also increased during this period. In 2021, 96% of police and 98% of court spending at the state and local levels went toward salaries and benefits, and 97% of state and local corrections spending went toward salaries and benefits.

Local Spending

In 2021 (which is the latest information available), as much as 87% of police funding came from local governments. The precise amount of police spending varies enormously by place.

City budgeting data compiled by the Action and Race Economy Center indicates that cities tend to dedicate 20% to 45% of their budget to policing expenditures. However, police budgets can differ drastically by place, even within the same region or state. Los Angeles, for example, spent 23% of its budget on policing. In contrast, San Francisco spent only 10%.

State Spending

Police spending by state governments in 2021, which mostly went to funding highway patrols, represented about 1% of direct expenditures. By contrast, it represented 13% of direct expenditures 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.

Decentralized and Overlapping Jurisdictions

The U.S. has complicated, overlapping police jurisdictions, largely due to the history of policing in the country. Policing evolved from the English common law system, privately paid watchmen in places such as Boston and New Amsterdam in the 17th century, and vigilantism, often with a historical preference for decentralized police.

The Rise of America’s Police System

The first official police department in America, which was modeled on the London Metropolitan Police, was established in New York City in 1845 as a response to middle-class frustration over city crime rates.

Since President Herbert Hoover’s 1929 National Commission on Law Observance and Enforcement (also known as the Wickersham Commission)—the first major national survey on law and order practices in the United States, commissioned in response to soaring crime rates during Prohibition—there have been questions over whether policing precincts should be strictly tied to political jurisdictions.

The commission tended to view local political control over the criminal justice system as a form of corruption. Since then, legal scholars argue, some aspects of policing have moved under the control of state governments. Much of policing remains the purview of local governments; Americans have historically tended to favor decentralized policing.

Modern Police Systems

Policing responsibilities for any single area now often overlap. Municipal police, state police, county sheriffs, and county police all may have jurisdiction. The same can be said about other police forces—a category that includes Native American tribal police forces and police affiliated with universities and public transit.

The U.S. Bureau of Justice Statistics started publishing data on justice-related expenditures in the early 1970s, although other forms of data on law enforcement predate this. The latest available BJS data says that local police departments account for most government-allocated policing funds.

The BJS also reports that there were more than 14,700 federal, state, and local police departments as of 2020. While these departments can vary in size, from nearly 44,000 officers to one officer, most are local departments with 10 or fewer officers. The bulk of local departments have jurisdiction over areas with fewer than 10,000 residents.

The Rise of Federal Police Spending

Federal spending on police is also notable but can be hard to track. The federal structure for police has grown considerably in recent years, especially as anti-terror and anti-drug activities have increased.

U.S. Department of Justice figures report that in 2020, there were about 137,000 full-time federal law enforcement officers involved in providing police protection and about 708,000 sworn officers in state and local law enforcement agencies.

Administrative Office of the U.S. Courts, Tennessee Valley Authority, and the National Aeronautics and Space Administration had the most growth in full-time employment between 2016 and 2020. However, most federal police worked for U.S. Customs and Border Protection, the Federal Bureau of Prisons, the FBI, or ICE.

As budget expenses grew, the crime rate plummeted. The rate of violent crime fell by half, and the rate of property crime fell by 59%, between 1993 and 2022, according to federal data as reported by Pew Research Center.

The Violent Crime Control and Law Enforcement Act of 1994, signed during the Clinton administration, upped federal funding for federal law enforcement programs, such as the Border Patrol and Immigration and Naturalization Service, and for state and local programs through grants, congressional authorization, and similar mechanisms. It also expanded the scope of federal policing.

Militarization of Police and Federal Involvement

In the last decade, Department of Defense assistance programs proved to be the most controversial of the federal police spending programs in the United States. In 2014, the fatal shooting of unarmed Black teenager Michael Brown caused riots in Ferguson, Missouri.

In the aftermath of the riots, attention focused on federal programs 1033 and 1122, which exist to aid police departments in acquiring military gear as diverse as office equipment and vehicles.

As the drug war escalated, these programs moved equipment from the military to law enforcement, which was supposed to help execute the wars on terror and drugs. The Defense Logistics Agency, which manages 1033, says that it 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 so far.

Program 1122, under the National Defense Authorization Act, makes funds available to law enforcement to get military equipment at a discounted rate for anti-drug policing.

Other federal departments, including the Department of Agriculture, the Department of Homeland Security, and the Department of Defense, offer grants and other money to local departments for purposes that range from anti-terror and antidrug activity to infrastructure improvements. 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 main federal programs meant to assist local police departments are the Community Organized Policing Services program and the Justice Assistance Grant program, both run through the Department of Justice.

• The COPS program established by the 1994 crime bill has provided funding for police recruitment and training in localities across the country since it was created. In 2023, this program provided $334 million to hundreds of police departments across the country to make 1,730 hires.
• The Edward Byrne Memorial Justice Assistance Grant program describes itself as the “leading source of federal justice funding for state and local jurisdictions,” and it offers money to cover operational costs and equipment purchases. It allocated $209,416,792 to states in 2023, according to the latest data that the program publicly provides. The program also allocates money to municipal and county governments.

The Bottom Line

Police spending is expanding and is becoming more reliant on federal funds. Protests over police killings of Black Americans have centered on police funding in the U.S., including some calls to defund or abolish the police and reinvest the money in other programs.

These proposals have met with opposition, particularly at the federal level, with critics such as President Joe Biden offering a dismissal of the notion in a Feb. 16, 2021, CNN Town Hall. Biden’s 2021 criminal justice plan included provisions to invest $300 million to “reinvigorate” community-organized policing, a plan that entails hiring more officers.

Opinion polling from 2020 suggested more popular support in America for measures such as training police, creating civilian oversight boards, and maintaining databases for tracking officers accused of misconduct than for disinvestment, as interpreted by the Pew Research Center.