Each state would be close to sovereign, with general freedom to create and enforce laws, choose and operate economic systems, run military organizations, etc. States would start as they are now, as geographic areas.
Each state would be divided into regions, such as the current counties, though preferably equal in size. Each region would have a nationally prescribed method of voting to switch to governing of another state. The methods prescribed and national oversight would be designed to prevent states from blocking their regions from leaving and ensure citizens say in the matter. There would likely be both a proposal by region government officials and a petition of some percentage of the population to get the issue on the ballot.
Upon a vote to change states, the region would go through a transition period, perhaps 2-3 years, during which the region governments will work with the governments of both states to ensure the switch goes smoothly. National oversight and the new state will help ensure the previous state doesn’t punish the region for leaving or try to take its assets for its own.
Within the period, the possibility to revert the decision by another vote will be allowed, with an easier path to initiate the vote, or even having it automatically take place a prescribed number of times. This will help ensure the change is actually desired, including taking into account changing circumstances of the new and previous states.
The ability of citizens to move (as in transfer citizenship) to another region will be ensured at all times by the nation, but during the transition period, it will be made as easy as possible.
Over time, the state lines will fluctuate and will likely become non-contiguous, though splitting up geographically could cause problems.
There would certainly be the risk of states disappearing and possibly the desire for new states to form. Provisions would be necessary to ensure states don’t become too large and few, such as:
- Blocking regions from leaving their state once they become a certain size, say five regions. Change at that point would have to come from within the state.
- Requiring a new state be created when a state dissolves. Any interested regions could ask to attempt to work together forming the new state. There would be a prescribed method for choosing which gets it, perhaps the largest number of regions grouped together that have a sufficiently developed plan.
- Enforcing maximum state sizes, where no more regions may join once a state reaches a certain number. The number would be chosen to enforce some minimum number of states or a given amount of power the number of regions would be theorized to give.
The role of the national government would be primarily to enforce the system and resolve interstate disputes. A small military would likely be needed for enforcement, to prevent states from attacking each other, and to help with defense against other nations. Protection agreements between states would ultimately provide for the bulk of this though.
States or counties would likely need to pay taxes to the nation to support its operations. The amount would be agreed to initially and amended as needed, agreed upon by all counties. The amount would be even for all counties, most likely as a percentage of GDP or some-such.