Some bad ideas simply refuse to go away.  California wants to get into the billboard business by selling licensing rights to display color changeable-message ads on the highway public right of way.

Advertising revenue would pay to replace aging traffic signs with modern LED displays and also pump new revenue into California’s coffers, according to a new lengthy report produced by the state’s transportation agency (Caltrans).

Caltrans suggests a four-year pilot to install 25 digital billboards in high-traffic areas in Los Angeles, San Francisco, and Sacramento.  The project would require federal and state waivers or exemptions from existing regulations that prohibit ads on the highway right of way.

Caltrans began circulating its ads-on-the-highway proposal to the state Legislature in May (the report is dated March 28, 2018).

The Caltrans report “concludes that it would be feasible to conduct a phased four-year demonstration pilot project of 25 changeable message signs to provide the appropriate test environment for the concept.”

Here are details:

• A private-sector partner would construct, maintain, and operate the changeable-message signs
• Caltrans would own the signs or retain the right to take ownership at its discretion (Page 22)
• Digital billboards on the highway built for this project should be exempt from state and federal spacing rules, says the Caltrans report (Page 32)
• Caltrans says the project would cost $10.2 million to install and $500,000 a year to operate, “to be fully recovered from advertising revenue,” and also would generate a projected $8.5 to $10.2 million annually for Caltrans (Page 1)
• The revenue share for Caltrans would be 50 to 60 percent (Page 21)

In 2016, the California Senate voted 19-17 to defeat a proposal for commercial advertising on highway signs.

The Trump Administration, with Elaine Chao as Secretary of Transportation, consistently has blocked advertising on the public right of way.

In 2017, Federal Highway Administration (FHWA), a unit of US-DOT, blocked a proposal in Texas to sell corporate sponsorships of highway traffic signs.

Feds said ‘no’ to corporate sponsorships in Texas

The feds also said “no” to a separate proposal to sell ads on the back sides of overhead traffic signs.

“Federal statutes and regulations generally prohibit advertising on signs or by other means on highway rights-of-way,” said Martin C. Knopp, FHWA Associate Administrator for Operations on April 26, 2017.

Early this year, FHWA took action to sanction the State of New York because it erected more than 500 signs to promote New York food, parks, and history.  Threatening to withhold $14 million in federal highway funds, the feds said New York State’s promotional signs did not comply with the federal manual on uniformity in traffic signs.

If New York State complies by September 30, “FHWA will reinstate the funds,” said FHWA Acting Administrator Brandye Hendrickson on February 1, 2018.

Insider’s take:  This proposal smacks of hypocrisy and self-dealing.  Freeway advertising is bad except if we are getting paid seems to be the message.  Insider thinks that any State which has stringent outdoor regulations and permits advertising on state public safety billboards is asking for a lawsuit by disadvantaged private billboard companies.  The proposal also opens the state up to free speech disputes.  What content is and is not acceptable for a government owned sign?  Insider hopes the California legislature just says no.

We do want to keep our eye on this as the program, which they propose would be run by a third party, has the potential to generate significant income as the state currently has 904 CMS structures and is planning on adding 281 more.

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