Governor orders audit of specialty plate program
May 30, 2012
SACRAMENTO, Calif. (AP) – Gov. Jerry Brown on Tuesday ordered an audit of California’s specialty license plate program after a review by The Associated Press found there was little oversight of the $250 million raised in the 20 years since the Legislature authorized it.
The administration asked its Department of Finance to undertake the review, said Elizabeth Ashford, a spokeswoman for the governor.
She said the governor had no immediate plans to return $3 million taken by Brown and former Gov. Arnold Schwarzenegger from a fund involving a memorial plate created in honor of the victims of the 2001 terror attacks.
The money helped close the budget deficit. Ashford said the administration would consider repaying the loan if it was shown that the missing money was negatively affecting the memorial license plate program.
The AP review uncovered that raid and also found there is virtually no independent oversight of how organizations spend the money.
Organizations and agencies participating in the specialty plate program must report annually to the state Department of Motor Vehicles about money collected and the percentage spent to promote the specialty plates, which isn’t supposed to exceed 25 percent of the revenue.
Other than that, there is no direct oversight. The nonpartisan Legislative Analyst’s Office has never examined the program, nor has the independent state auditor’s office.
The state will begin its investigation as soon as possible, said H.D. Palmer, spokesman for the California Department of Finance.
“We will initiate this process immediately,” he said. “The scope is still to be decided, but sooner as opposed to later.”
The Sept. 11 memorial license plate fund was supposed to finance scholarships for children whose parents perished in the attacks, and help law enforcement fight threats of terrorism.
Loans in 2008 and 2011 included standard language that required state payback if the money were needed.
The license plate program has raised money for a variety of popular causes, from promoting the arts to preserving Lake Tahoe.
State Assemblyman Jose Solorio, who championed license plates for pet lovers this year, said state agencies that benefit from the program should use extra caution in spending what are essentially donations.
Solorio, D-Santa Ana, added that cities and counties that receive funding from those pet plates intended to promote spay and neutering programs will have to report on how the money is spent.
“Both from the fee-payer side as well as from the legislative side, it’s our intention that the money go to a very specific place,” he said. “We need to make sure the state is tracking how the money is expended.”
There is no doubt that specialty plates have been a boon for organizations since the Legislature authorized the program in 1992 as a fundraising tool for public agencies and nonprofit organizations.
California now has 10 special-interest license plates, with an 11th, supporting agricultural education, on the way. The last specialty plate was established in 2002, but lawmakers are proposing at least five new plates this legislative session.
Assemblyman Jared Huffman, D-San Rafael, is promoting a specialty plate to help fund state parks, a response to closures planned because of the state budget deficit.
In a press release, Huffman characterized the program as a way to keep state parks open. In a telephone interview, he said he purposefully wrote the legislation to allow the Department of Parks and Recreation to spend the money however it sees fit.
“Right now, every part of the parks budget needs help,” he said. “I’m not troubled if it goes to park maintenance or the immediate crisis of closing parks.”
Several beneficiaries of the license plate program say there is no need to track the money collected because it’s spent as intended.
Most of the participants are state agencies that must file annual spending reports.
Additional tracking would be redundant, said Mary Beth Barber of the California Arts Council, which has raised more than $51 million through the program since 1994.
“If you start saying that we need to have everything in a license plate report, then you’re going into the duplicative efforts that state agencies try not to do because it wastes staff time,” she said.
The Arts Council does not track its license plate funding separately from other revenue, but Barber said three quarters of the money has gone to grants while the remaining 25 percent – or $12.7 million – has been spent on administrative costs.
A few programs report spending virtually no license plate funding on overhead. The nonprofit Yosemite Conservancy also said it could provide information about specific programs benefiting from the funding.
Several other groups, including the California Coastal Conservancy, could not provide exact accountings of how the money raised through the sale of specialty plates had been spent.