The buzzword is "realignment", and a lot of states are considering the move. One problem with this idea (a position taken by California Gov. Jerry Brown) is that if the state is broke, the localities are in even worse shape.
But reporter David Brewster thinks it's a good move:
"...once things are more localized, the taxpayers tend to have more trust and the issues seem less partisan.
A final point in favor of this divestment strategy is that pushing important functions down to the regional level can be a spur to the creation of strong regional entities."