php dropdown from mysql city state group

im trying to set the group option in a select box to a state and list all the cities in that group of states, and its not working as expected

current code

include ("../mysqli_ctx.php");
$path="../";
$result1 = mysqli_query($mysqli,"SELECT id, state,city FROM current_loc ORDER BY state");

//echo "<pre>";print_r($result); echo "<pre>";
while($row1 = $result1->fetch_row()) {
  $rows1[]=$row1;
}

echo "<pre>";print_r($rows1); echo "</pre>";


$result = mysqli_query($mysqli,"SELECT id, city, state FROM current_loc ORDER BY state");
echo '<select style="width:300px" id="source">';
$grp_flag= TRUE;
$last_state="";
while($row = mysqli_fetch_array($result))
{
  // show here
        if ($grp_flag == TRUE) {
            echo '<optgroup label="'.$row['state'].'">'."\n";
            $grp_flag=FALSE;
        }
 
  foreach ($row as $city => $state) {
          if ($state == $row['state']) { 
          echo '<option value="' .$row['id'] . '">' . $row['city'] . '</option>'."\n";
          }
          else {
            echo "</optgroup>"."\n";
            echo '<optgroup label="'.$row['state'].'">'."\n";
          }
     }
}
echo ' </select>';


/**
 *
 * @todo       do
 * @date       The current date is: Wed 10/23/2013 
Enter the new date: (mm-dd-yy)  *
 */


?>
<select style="width:300px" id="source">
    <optgroup label="IL">
        <option value=" "="">Champaign</optgroup>
    </optgroup>
    <optgroup label="MA">
        <option value="">Boston</option>
    </optgroup>
    <optgroup label="OH">
        <option value="">Springfield</option>
    </optgroup>
</select>

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current output

<select style="width:300px" id="source"><optgroup label="IL">
</optgroup>
<optgroup label="IL">
</optgroup>
<optgroup label="IL">
</optgroup>
<optgroup label="IL">
</optgroup>
<optgroup label="IL">
<option value="2">Chicago</option>
<option value="2">Chicago</option>
</optgroup>
<optgroup label="IL">
</optgroup>
<optgroup label="IL">
</optgroup>
<optgroup label="IL">
</optgroup>
<optgroup label="IL">
<option value="5">Champaign</option>
<option value="5">Champaign</option>
</optgroup>
<optgroup label="MA">
</optgroup>
<optgroup label="MA">
</optgroup>
<optgroup label="MA">
</optgroup>
<optgroup label="MA">
<option value="1">Boston</option>
<option value="1">Boston</option>
</optgroup>
<optgroup label="OH">
</optgroup>
<optgroup label="OH">
</optgroup>
<optgroup label="OH">
</optgroup>
<optgroup label="OH">
<option value="3">Columbus</option>
<option value="3">Columbus</option>
</optgroup>
<optgroup label="OH">
</optgroup>
<optgroup label="OH">
</optgroup>
<optgroup label="OH">
</optgroup>
<optgroup label="OH">
<option value="4">Springfield</option>
<option value="4">Springfield</option>
 </optgroup></select>

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should be similar to this

<select style="width:300px" id="source">
    <optgroup label="IL">
        <option value"="0">Champaign</option>
        <option value"="5">Chicago</option>
   </optgroup>
    
    <optgroup label="MA">
        <option value="1">Boston</option>
    </optgroup>
    <optgroup label="OH">
        <option value="2">Springfield</option>
    </optgroup>
</select>

Select allOpen in new window

and ideas where my code is wrong please
thank you In Advance for any code or help you may provide