States shouldn't be flying it imo.
		
		
	 
Agreed. 
racist or not, it's certainly treasonous in its way. ..but at least we don't have  a history of sending people off to prison camps for displaying it (as the Soviets did to their occupied states for 6 decades).
that being said...yes, of course it's racist. "state's rights" is probably the oldest, most hackneyed political euphemism adopted through this country's politicis. 
Yes, the war was fought over "State's rights" The south seceded because of "States's rights" ....the state right to own slaves that is. 
Or, more directly, the right for new states to vote slavery legal, if they so wished. 
call it state's rights, call it slavery, it was one single issue, and that is it. This is exactly what the flag has always represented. And I'm from the south, and this is how we were taught the southern perspective of the Civil War: "States rights" was complicated! Well, no, no it wasn't.
Slavery was actually complicated--the fact that the economy of the south was completely tied to the vile institution, that the failure to spread slavery, the threat of ending slavery would absolutely devastate those states--yes, that is complicated in its own way. Sure, it was very much an economic fear tied to slavery, more than it was a "black people are lesser people and should be slaves" (Even though, of course, that was the sentiment), but it was still only ever about slavery.