Defund Cities that Defund the Police Act of 2023 This bill prohibits state or local governments that abolish or defund police departments from receiving certain Economic Development Administration grants or Community Development Block Grant funds. Specifically, the bill applies to state or local governments that (1) abolish or disband the police with no intention of reconstituting the police department; or (2) significantly reduce the police department's budget without reallocating a portion of those funds to any other community policing program, provided that the jurisdiction did not face a significant decrease in revenues in the previous fiscal year. Further, a state or local government that abolishes or defunds a police department must return certain Community Development Block Grant funds it has already received.