California's prison-building boom left small towns economically dependent on incarceration, but sentencing reforms since the 2010s have cut the state prison population from about 170,000 to 90,000, prompting Gov. Gavin Newsom to close five prisons since 2019. Communities are responding differently: Susanville, remote and isolated near the Nevada border, has seen population decline, deficit budgets and failed legal challenges to closure, with leaders warning of eventual insolvency. Blythe, near the Arizona border, lobbied state officials for assistance after its prison closed in 2022 but says it has received little direct help, though the state notes nearly $1 million was sent to regional workforce development. Tracy, closer to the Bay Area, has fared better, drawing interest from agriculture, education and casino developers for its former prison site.
Researchers say the economic benefits prisons brought rural areas were often overstated and short-lived. More closures are expected as lawmakers seek to cut costs and address billions in deferred maintenance across aging facilities, with a prison in Norco set to close in October.