Will Digital License Plates Help or Hurt California?

California might have found a way to decrease its $19 billion state deficit in an unconventional way. The state’s legislature is considering a bill that will let the Department of Motor Vehicles investigate digital advertising on licenses plates.

The bill, proposed by Sen. Curren D. Price (D), has already unanimously passed the state Senate and is currently being reviewed by the Assembly. If it passes, the California DMV will partner with innovation companies to research, develop and institute Digital Electronic License Plate (DELP) technology at no cost to the department or the state. Funding, estimated to be about $200,000, would come from companies interested in developing the plates or other private vendors interested in advertising on the trial devices. A small San Francisco tech company named SmartPlate is already on board to produce a prototype.

The device would look like a standard license plate when the car was in motion, but switch over to a digital ad when the vehicle stopped for four seconds or longer. The license plate number would be visible in some capacity at all times.  

Revenue would be generated in two ways: Companies would pay to advertise on the plates and motorists could purchase personalized messages and/or logos that flash on the back on their vehicles (think of it as a dynamic vanity plate). All interested advertisers would contact the DMV directly.

“State governments are facing unprecedented budget shortfalls, and are actively rethinking the use of existing state assets to create new ongoing revenue opportunities,” Price explained in a press release.  “This legislation provides a unique opportunity for California to work in partnership with some of the state’s most innovative enterprises to rethink how we can use our most basic assets to achieve greater efficiencies and cost savings, while generating new revenues for the state.”

Price believes that the digital license plates will not only bring in additional revenue for the cash-poor state, but create jobs for residents in the private sector. It will conversely eliminate state spending by streamlining the current process for creating, distributing and registering license plates (primarily by decreasing the amount of staff needed to complete the process.) In addition to the new revenue stream, the license plates would be able to broadcast critical real-time traffic updates and public information like Amber Alerts.

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