Here is my suggestion. Let Mexico annex Southern California. Cut off all water coming from other U.S. states and let it sink into another Third World hell hole. And on top of that deny any aid from U.S. tax payers.
After two years give them the option to opt back in only if they swear to uphold U.S. law on illegal immigration. It would be interesting to see the result of that.
I say, do it now even though it's still part of the US. In the Old West he who controlled the water called the shots.