It may not ever happen, but I think it addresses your first concern since, as you mentioned, the divide is urban vs rural which is a good proxy for city boundaries.
What I don't understand is the economic implication of such a split. Is there a way to keep the economic stability of the country while having more cultural freedom?
I suppose one of the problems with this sort of split is that some cities can leverage agriculture, heavy industry, business activity, or tourism; but some cities probably exists that don't have any means to generating income beyond taxing citizens.
The Greek debt crisis happened because those southern countries joined the euro without centralizing country debts up to EU. Greece still had it's debt yet could no longer service it by printing it's own currency. At inception, USA federal took over State debts.
Nebraska is a red State and has about $1000 State debt per resident. Not likely to go bankrupt before blue Illinois.
https://www.270towin.com/maps/blue-red-states-2000-thru-2012
https://worldpopulationreview.com/state-rankings/debt-by-sta...
Illinois loses a net of $4.7k/year/person to federal transfers[1]. Get rid of that and they could pay off their full debt in a few years.
[1] https://worldpopulationreview.com/state-rankings/donor-state...