If California wants to curb poverty, its local governments must become richer.

That may be the most important lesson of the recent history of Stockton, as recounted by Stanford Law School professor Michelle Wilde Anderson, a scholar of poverty and local government, in her Zócalo Book Prize-winning book, The Fight to Save the Town.

Anderson expertly portrays the challenges of four troubled U.S. localities, including Stockton. Her work is noteworthy for how it connects the dots between the poverty of people and the poverty of our local governments.

Anderson begins by detailing a woefully underappreciated Californian, and American, problem: deep, decades-long declines in federal and state support for local governments. The cuts have been especially deep at the community level. Between 1979 and 2016, the author notes, federal funding to neighborhood development decreased 80%.

Cities with lots of business and wealthy residents can weather these storms. But the trend has been devastating to municipalities and rural places with high percentages of poor residents, who have less to offer in tax and fee revenues, and desperately need the local programs—in areas like health, recreation, and crime prevention—that get cut. Local governments responded by taking on debt, reducing services and staff, selling public land, and raising taxes and fees—all measures that hurt local residents.

“When local governments are populated mostly by low-income people, there is typically much less money for public services,” Anderson writes. “Weak, broke local governments make it harder for residents to lead decent lives on low incomes or get their families out of poverty. Entire towns become poverty traps.”

One of those poverty traps is Stockton, which Anderson depicts both before and after its 2012 bankruptcy, then the largest municipal bankruptcy in U.S. history.

Stockton, a city of 322,000 at the southern edge of the California Delta, is one of the state’s oldest and most diverse places. Its history is too long and complicated to recount here, but segregation, drug trafficking, police violence, overdependence on the military, and long commutes (to Bay Area jobs), have all been major factors disrupting the lives of its people, impoverishing neighborhoods, and making Stockton a “city of orphans,” Anderson writes.

Stockton’s government has long failed to address such problems. Facing declines in federal and state support, the city subsidized real estate developers instead of investing in existing community members. It chased new residents, visitors, and tax revenues by building retail, new housing, and tourist attractions in its center. And it prioritized local government employees, and their unsustainable retiree health and pension programs, some of which were financed with debt.

The strategy fell apart in the Great Recession, with record home foreclosures and the failure of high-profile developments. The city’s giveaways to its powerful local government employees overwhelmed its budget. The results? Layoffs (including 20% of police officers, 38% of public works employees, 46% of library personnel, and 56% of recreation staff), huge cuts in programs, and the 2012 bankruptcy.

Anderson’s book is deeply interested in how community groups, nonprofits, and a new generation of local officials, led by a Stanford-educated twenty-something city councilmember-turned-mayor Michael Tubbs, responded after the bankruptcy. The story she tells is at once encouraging—it shows the ability of local people and officials to make progress in the most difficult of circumstances—and also sobering, because the progress is so tenuous.

What worked best were intense, multifaceted efforts to empower residents to solve problems in South Stockton neighborhoods after decades of stigma and disinvestment.

Working together, local officials, nonprofits, and community groups listened to residents and pursued their priorities. This work, mostly by people involved in the Reinvent South Stockton Coalition (RSSC), started with cleaning up and reclaiming public spaces—first shoring up a park, then shuttering an open-air drug market near a liquor store. Community members opened a clinic that offered mental health resources. And Tubbs and other allies led the way in taking a series of small and large steps focused on treating and reducing the trauma local residents felt.

Poor cities, the scholar concludes, often cut everything except emergency services and public safety, leaving them without the fundamental ingredients that fight poverty: mental health resources, a sense of personal safety, access to living-wage jobs, and secure housing.  “Our theory of change,” one RSSC leader tells Anderson, “is investing in people. We have to shift the language from people’s problems to their assets.”

South Stockton, and the city as a whole, saw significant gains from this work, though it’s far from clear if the progress can be sustained. Tubbs and his allies lost their re-election bids in 2020. The pandemic undermined local systems and community projects. The founder of one important group, Fathers & Families of San Joaquin, was arrested, undermining trauma recovery work.

Anderson is clear-eyed about the need to change the very structure and organization of local government. One of her suggestions for places like Stockton is “changing jurisdictions,” which could mean moving around municipal lines or combining cities into regional units. She also argues that we need new ways of thinking and talking about troubled cities—not as “hellholes” that are “dying” but as places that, with the right resources and new structures for residents, can make poor residents wealthier.

In California, I’d go even further than Anderson and suggest that empowering cities requires restructuring the state itself. California, since the passage of Prop 13 in 1978, has become heavily centralized, with tax policies and resource allocations for localities mostly decided at the state level. Returning power to local governments would require so many different changes to existing policies and budgeting that the best path forward would be a new constitution.

Our last two governors, Jerry Brown and Gavin Newsom, have both championed local government and fighting poverty, at least rhetorically. Meanwhile, both men centralized more power in their offices, and eschewed constitutional reform. Fighting poverty in this state requires politicians at the state level to do the very opposite—and place more resources and power in the hands of people, their communities, and their local governments.