Hi,
If you want to, you can remove the state from the PayPal form by removing the line:
$vars["state"]=@$order->cart->$address_type->address_state->zone_code_3;
in the file plugins/hikashoppayment/paypal/paypal.php
However, that field is required to US addresses and it has to be the code of the state not the name based on the paypal API documentation. So if you remove it and have US citizens buying on your website, it will probably generate an error on PayPal website if you remove the state.
If you only sell in the UK, that won't be a problem though.