I ran into this very interesting web site recently, the National Center for Education Statistics' State and County Estimates of Basic Literacy. The next time you see someone looking down their nose at us illiterate knuckledraggers here in Flyover Country--have them take a look at this! It measures what is defined as basic literacy (in English) of adults in every county in the U.S. The blue states don't do so well: California, 23% lack basic literacy; New York, 22%, D.C., 19%; New Jersey, 17%. Many of the red states are astonishingly better off: Idaho, 11%; Alaska, 9%; Kansas, 8%.
Now, some of this is probably tied to large populations of recent immigrants who can't read English. A number of the southern border states are almost up there with the blue states: Texas, 19%; New Mexico, 16%. But Arizona only has 13% adult illiteracy--and this was a survey from 2003, before Arizona started passing laws to punish those who employ illegal aliens.
Somewhat to my surprise, the Old South states that are commonly derided in some circles as "the Bible Belt" really aren't so bad. North Carolina: 14%; Alabama, 15%; Mississippi, 16%. These aren't great numbers--but they aren't California or New York, either.
You can also break these statistics out by county. I was startled to see that Boise County (where I live) is actually better than the state as a whole: 9% for Boise County, vs. 11% for the whole state. The real shocker is Clark County, up in the upper northeast corner near Montana, with a 37% adult illiteracy rate--although the tiny population means the 95% confidence interval is huge for that county.