This is part of the America's Future series airing on FOX News Channel, looking at the challenges facing the country in the 21st century.

ROCHESTER, N.Y. — Since 9/11, the federal government has issued Homeland Security grants to prepare local police departments to face domestic terror. But some departments say they're losing ground now to common criminals, because federal funds to fight neighborhood street crime have fallen victim to the budget ax.

Click here to see more on police struggles with street crime.

Thanks to Homeland Security money, police in Rochester acquired a high-tech armored tactical vehicle their SWAT team can use in an anti-terror operation, as well as a bomb-disposal unit. It cost hundreds of thousands of dollars and has the ability to detect chemical or biological agents in explosives.

But what the department desperately needs, says Chief David Moore, is more police officers to fight everyday neighborhood crime, and he says cutbacks in federal funding are hindering the department's ability to hire them.

"It's causing us to basically rob Peter to pay Paul," he said. "In other words, we're taking very needed resources from within our city and purchasing additional officers, and that's been very problematic for us."

The number of federally funded police officers in the Rochester Police Department is down 50 percent from a decade ago. And this year, after 14 years, the Justice Department program COPS (Community-Oriented Policing Services), which helps put police on the nation's streets, was eliminated.

Another similar program, the Byrne Justice Action Grant, has seen dramatic cuts this decade, dropping from $757 million in state aid in 2003 to $107 million in 2008.

Without the money, Chief Moore has had to redirect his resources.

"I have pulled 80 officers from critical positions throughout the Rochester Police Department, whether that be in licensing, narcotics, vice, special investigators," he said.

"We have pulled those officers out of the building, putting them back in uniform, and that has been very, very problematic with other things that are very valuable to this community."

Beat cops in Rochester say they need more hands on deck. On the rare occasions when they get a break from answering calls, they set up impromptu surveillance posts and watch street side drug deals go down one after another in broad daylight.

Having officers ride alone puts twice as many police cars on the streets, which is one way the department makes up for a lack of officers.

FOX News rode along with Officer Erique Gomez as he pulled over a 31-year-old driver and found a car littered with used needles, bloody rags, and a small amount of cocaine.

Gomez could have hauled the man off to booking, but that would have meant loads of paperwork, which would have taken officers off the street — a luxury they can't afford right now. So Gomez eventually let the offender drive away with a promise to appear in court to face a charge of drug possession.

The U.S. Conference of Mayors estimates more than 90,000 more police officers are needed in departments nationwide to return them to what it calls "appropriate staffing levels."

With that in mind, it plans to present the next president with a crime-fighting "wish list," which will make clear their belief that local crime is America's problem.

"Americans today are much, much more, and I mean overwhelmingly, more concerned with the thug on the street corner than they are with a terrorist attack," said Miami Mayor Manny Diaz, head of the conference of mayors. "And so I think the mood of the country is in that direction."

Click here to see more reports on America's Future.