A state like Mississippi wouldn't WANT bad schools, but that's all they'd be able to afford. The earnings of Miss citizens is so low that the state wouldn't be able to fund anything effectively. Everything would be in shambles.
No, more like taking much of the responsibilities from the federal government and give it to the states.
Flipping the tax burden around. Let the federal gov be in charge of interstate travel, and defense, and the state for the rest.
Instead of 5% to the state, and 25% to the federal, have it turned around.
If Mississippi wants bad schools and low income taxes....so be it.
If New Jersey wants awesome schools and high income taxes....so be it.
Give people options.
People with means would leave the state to get away from the poor conditions and the rest would live in developing country-like conditions.
The only states that would survive are the states with large populations, relatively high incomes, and most importantly, a strong corporate presence.
Out of the 20 or so states that actually contribute more to the federal government than they receive back, only one is in the South and that is NC. Texas too if you call that the south (but I just consider Texas as Texas). Both Texas and NC have very strong corporate presences.
Mississippi could try to attract better businesses with low taxes, but realistically, taxes are not the #1, 2 or 3 reason why a company locates where it does. No company is going to locate in a terrible place with poor infrastructure and a low skilled workforce just to save some tax money.