Sacramento, California

A company town, where the company is government. In a city where one in four households contain a government employee, the crippling state budget deficit, police layoffs, fire engine brown-outs  and park closures could easily signal only the bleakest of futures. But for the oldest city on the West Coast, persistence is key. This is a town where, through sheer force of will, residents and an enthusiastic mayor are keeping their major league basketball team around for another year. It’s a town where, despite that recession gloom, the numbers of chronically homeless people on the streets actually went down this past year. It’s a place where residents are volunteering to maintain city parks when the Parks & Recreation budget is slashed. And where people are figuring out ways—from clothing swaps to home shares—to deal with the hard new economic reality.