About three-quarters of states offer a tax deduction or credit for a portion of contributions residents make to the accounts, according to Morningstar. California doesn't, which may be another reason it didn't receive many bids, Dresslar said.
"Given our fiscal difficulties here that is not going to happen any time soon," Dresslar said of the potential for starting a tax break for contributions. "It's just not in the cards now until the budget gets straightened out."