California budget idea: Ads on e-license plates

NEW YORK (CNNMoney.com) -- California's legislature is exploring the feasibility of electronic license plates with digital ads, a move that its leading proponent says could add jobs and help in combating the state's budget crisis.

Sen. Curren Price, a Democrat from the Los Angeles area, said the technology will resemble traditional license plates, with plate numbers visible at all times. However, digital ads and public service announcements would flash on the plate's screen when the vehicle is stopped for more than a few seconds.

The technology could provide an additional source of revenue for the cash-strapped state, according to Price, the bill's author, as advertisers and technology companies contract with the Department of Motor Vehicles. He said the plates could also aid small businesses and add jobs to the ailing economy in the technology, sales and marketing, and service industries.

"State governments are facing unprecedented budget shortfalls, and are actively rethinking the use of existing state assets to create new ongoing revenue opportunities," he said. "This is a unique opportunity for public-private partnership."

However, Price said he doesn't know how much revenue electronic license plates would generate, or how many jobs they would create. California's budget deficit is an estimated $19.1 billion.

After passing the California Senate in late May by a unanimous vote, the bill was to go before the Assembly's Transportation Committee next week.

Will Shuck, a spokesman for Transportation Committee chairwoman Assemblywoman Bonnie Lowenthal of Long Beach, said that this is only a "study bill" that will allow, but not require, the Department of Motor Vehicles to study the technology's feasibility. It will not yet permit the use of e-license plates.

Price said some lawmakers might fear that the electronic license plate poses a dangerous distraction on the road. But he defended the idea.

"As proposed, the electronic license plates won't be any more distracting than the current license plate is," said Price, adding that the technology will provide real-time traffic and public safety information such as amber alerts and emergency traffic updates.

The electronic license plate technology is in its nascent stages, with very few companies working on it. San Francisco-based Smart Plate Corp. is one company in the so-called emerging alternative media messaging industry poised to benefit from the legislation. A spokesman for the company said that the technology and its purpose are misunderstood.

"What people fail to understand is that we're not trying to turn vehicles into mobile billboards," said Mark Bianchi of Smart Plate. He added that the e-license plate would be little different from the personalized plates that states sell to generate additional revenue.

Price said the research phase, which would cost taxpayers nothing, could take up to a year to complete. If given the green light, California would be the first state to implement such technology, but Price hopes it won't be the last.

"Hopefully this will be the first of many bills that allow states to leverage the skills of California's small business and the high tech entrepreneur community that exists here," said Price.