I'm in the South. I believe it's a dog-whistle, aka "code phrase," for many.
Oh, I agree. It is for a certain percentage of people. But, so are code words like "Kenyan" and "Birth Certificate." The only people who appear to fixate on those terms are people who deeply resent having a black president.
However, taken as a stand alone statement, I don't believe it can accurately be used to determine what someone thinks about race. In fact, I'm generally inclined to cut people some degree of slack unless what they say is clear and overt...such as saying that "groups of blacks should be avoided." That's pretty clearly a racist statement. Southern pride...not so much.
At least where I live, there's a lot of hoopla about "Girls Raised in the South" (GRITS) and other southernisms.
I actually think that racism is less prevalent in my city than it is in a lot of places I've lived and worked. Here, when you see it, it tends to be overt, and not covert at all. But, I think that in my community, at least, it's more of an economic/class thing than it is a racial thing. People are bigoted (in fairly equal measure) against low class blacks
and low class whites. And, People seem fairly supportive of black professionals and middle or upper income black families.
For instance, my city is 70% white, and but we have a black mayor, black police chief, and plenty of other black officials, including a ton of black principals and other administrators in predominantly white neighborhoods. I don't believe that the average racist down here would vote for a black mayor, truth be told, but in our last election, both candidates for mayor were black. You don't see that as much up north. You don't see black mayors...except in predominantly black communities. You don't see black chiefs...except in predominantly black communities.
It's a critical difference between the North and the South. Northerners tend to talk a good game about being non-racist, but they don't vote for black leaders and they don't want to live in integrated neighborhoods like we do down here.