Well, if the town pays the departments and then the town goes bankrupt, it seems like the town can't pay the departments and thus they're still bankrupt. It also has the effect of pissing off everybody wondering where the fuck their money went, only to find out that it was pissed away by their police department.

Also, I don't know much about your town, but I know my town doesn't have shit for social services or social service spending like the majority of small towns in the United States.