This is what I've been arguing for, with some added detail:
Ideally I'd see each instance run at a state / province level. I imagine this being a manageable level of account granularity for each city and major government aligned institution in need of a short-form-text publishing vector (offices, municipal departments, etc). It would also help prevent account name collisions.
IT infra can be built to push mastodon updates downstream to other social media platforms.