11 'danger states' investors should avoid

Published: Thursday, Dec. 6 2012 12:00 p.m. MST

The Alabama Capitol in Montgomery, Ala., is pictured Tuesday, Feb. 7, 2012. Alabama was listed as one of the 11 danger states for investing.

Dave Martin, ASSOCIATED PRESS

Enlarge photo»

SALT LAKE CITY — There are 11 danger states investors should avoid because of the high risk of a fiscal tailspin, according to Forbes.

Whether it's buying a house or municipal bond, these states are risky spots because of an upcoming rising tax burden, state finances deterioration and an exodus of employers.

The list included California, Hawaii, Illinois, Kentucky, South Carolina, Maine, Mississippi, Alabama, New Mexico, New York and Ohio. It was created by evaluating two factors: whether it has more takers than makers and a scorecard of state credit-worthiness, according to an analysis done by Conning & Co.

When takers (those who draw money from the government either by being an employee, pensioner or welfare recipient) outnumber providers (those who are gainfully employed in the private sector) taxes get too high. In states where this is a major issue, employers and prosperous individuals leave, making taxpayers who stay all the more burdened.

When considering the credit-worthiness, Conning rated North Dakota as the safest place to lend money and Connecticut as the most dangerous.

EMAIL: alovell@deseretnews.com

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