Atlanta did this years ago because of lack of funds.
Savannah still has a mounted unit. One of my neighbors down the road, a cop, has 4 of the retired Savannah PD horses.
Charleston, where I have lots of relatives, is doing it now because of budgetary cuts. My vet overseas the health of Charleston's police and carriage horses.
Police horses in Atlanta and Savannah and Charleston were used for "good will" more than for crowd control or law enforcement.
I have a friend in NYC who is on the mounted squad, and up there the horses have more of a law enforcement job. If anyone is interested in taking in a retired police horse, you should contact the mounted patrol. I know that Ron in NYC is sometimes looking to place a horse from his unit.
I would think that retired police mounts would make great therapuetic riding horses...any reasons why they wouldn't? I had mentioned this to our local TRC a few months ago, but maybe the topic is worth revisiting!