To resolve this, make sure that the Country field is populated in the Core address record.  The resulting constituent update in ConnectRE will then add the state to the address record in RE.  

It is a requirement in the Raiser’s Edge that drives this – in order for an address record in RE to be created correctly, it requires a country code, and based on that country code, that is what determines the table for the State to populate. So, for example, when United States is selected, then the State table pulls from a list of US States. If Canada was selected, the drop-down will reflect Canadian Provinces. But in all instances, when you manually add an address, Country cannot be blank.

In Core, on the other hand, Country is not required, and when a country is not selected, the State field changes from a table drop-down to an editable field. However, when that update comes into ConnectRE, it will still create the record (overriding the requirement). However, since State is never an editable field, only a table drop-down, it doesn’t know what table to select, and so State will remain blank until you select a Country.