I'm not sure whether it would be the state or the county or the city or a combination who would incur expenses as a result of this funeral. Either way, that's just an expense that happens with an event like this.
I had heard something about an admission charge to the service at the Staples Center yesterday, but I haven't kept up with it so I don't know if they're doing that for sure or if that was just a rumor or still under consideration or what. At first it sounded like a bad idea, but the more I think about it... why not? It would perhaps keep some who would have gone for a freebie away, thus helping just a bit with crowd control.
Edited to add: And a public thing at Neverland, no matter who foots the bill, would have been completely impractical and a REAL nightmare for everybody. That place is in a rather secluded area from what I've seen, and the roads leading to it aren't exactly 4- or 6-lane highways. It would have been a complete mess.