That code was suppose to sort by values

You're nearly there...

my %hash;
for my $i (0 .. $#fname) {
    $hash{ "$fname[$i] $lname[$i]" } = $state[$i]
}

# sort the keys by value

for my $key ( sort { $hash{$a} cmp $hash{$b} } keys %hash ) {
    print "$key $hash{$key}\n";
}

# alternatively

my @sorted = sort { $hash{$a} cmp $hash{$b} } keys %hash;

for my $key ( @sorted ) {
    print "$key $hash{$key}\n";
}
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$a and $b are special variables and are not the same as $i and $j in your example... see sort