That would be robust decentralization, yes. They would coordinate with one another and a downsized federal agency to fund shared projects. By retaining control of their own budget and authority, states would become resistant to federal whims.

Take the recent spat about the federal government not helping California pay for the fires. Ideally federal taxes would be slightly lower, California taxes would be slightly higher, and there would be no need to rely on federal money. So much federal control has been created by taking extra money from the states and then distributing it back to us with strings attached.