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Hogs, ducks darlings in license plate sales
James Payne, Manager of Direct Services, shows one of the more popular plates at the inventory control room of the Department of Finance and Administration on Friday, Feb 8, 2018, in Little Rock.
LITTLE ROCK When it comes to the state's specialty license plates, hogs and ducks rake in the most cash, while small public colleges bring up the rear, according to recent data provided by the Department of Finance and Administration.
The simple 6-by-12-inch white metal plate with Arkansas lettered in blue and a red Razorback underneath underlined by "University of Arkansas" in black generated more than $1.3 million in 2018 as the state's top seller. The majority of the amount -- nearly $1 million -- was paid to the university's Arkansas Alumni Association to pay for college scholarships.
Overall, the state's 94 special-interest license plates and decals funneled nearly $4 million back to nonprofit organizations and educational institutions the designs represent.
"Specialty plates create a unique opportunity for the state's nonprofits to generate additional funding while allowing Arkansans to prominently display their support for an organization or cause," said Scott Hardin, spokesman for the state Department of Finance and Administration.
There is a wide gap between the best-selling Razorback plate, which sold 37,391 plates in 2018, and the second-most-requested Ducks Unlimited (Design 2) plate, which sold 7,492 over the same time period -- one-fifth the number of the UA plates.
The picturesque plate featuring a mallard duck taking off from wetlands raised $187,300 in 2018 for the state chapter of national Ducks Unlimited's conservation efforts. The Design 2 plate far outpaces the sale of the organization's other plate design -- featuring a wood duck standing on one leg -- which brought in $75,500 for the organization last year.
The specialty plate program was authorized by the state Legislature in March 1993 to generate scholarship money for participating schools.
When licensing a vehicle, automobile owners can purchase a regular, run-of-the-mill Arkansas plate or they can choose a specialty plate, which varies in cost depending on the organization sponsoring it.
Most can be purchased for a $10 processing fee that goes to the Department of Finance and Administration and the cost of the special-interest plate, which is usually $25.
Vehicle owners can personalize the special plates for an extra $25.
For example, a vehicle owner would pay $35 for a nonpersonalized University of Arkansas Razorback specialty plate with $10 going to the state and $25 to the Arkansas Alumni Association.
Some organizations, such as the Arkansas Down Syndrome Association, charge only an extra $10 for the specialty plate. A vehicle owner would pay a total of $20 -- a $10 specialty processing fee and $10 to benefit the organization.
To qualify to create a specialty license plate, the applicant must be a nonprofit organization or educational institute in the state and have the proposed design approved by the Arkansas State Police and the Department of Finance and Administration.
A new plate design cannot be issued unless the Legislature repeals a special license plate, according to Arkansas Code Annotated 27-24-111.
Universities or colleges must use at least 85 percent of the donations for academic or need-based scholarships. State legislation allows the educational institutions to use up to 15 percent of the proceeds to pay administrative and promotional costs.
Each specialty plate sponsor must submit an annual accounting report to the Department of Finance and Administration, detailing the revenue and expenditures associated with the sale of the special license plate.
The UA Razorback license plate allowed the Arkansas Alumni Association to award more than $1.1 million in scholarships to nearly 500 students last year, said Brandy Cox, executive director and associate vice chancellor of the organization.
The first scholarships -- $3,200 split between two students -- were awarded by the association in 1990, before the specialty plate program. Since then, the impact of the group's scholarship program through 2018 totals about $9.6 million, Cox said.
"Because the license plates are at no cost to us, this program has provided a self-sustaining opportunity to raise and receive funds for student scholarships," Cox said. "The Arkansas specialty license plate has significantly increased the scholarship funds that the alumni association has been able to award since its inception."
All of the state's license plates -- including specialty and regular license plates, as well as truck and school district plates -- have been made since 2001 by Waldale Manufacturing out of the small town of Amherst in Nova Scotia, Canada.
Only Waldale and the Tennessee prison system bid on the most recent Arkansas contract when it was let in April. Waldale won the state contract with its $1.2 million price tag to Tennessee's $1.8 million bid.
Contrary to popular belief, most states in the nation don't use prison inmate labor to manufacture license plates. The exceptions include Tennessee, Michigan, Alabama and California. California has been procuring the license plates from Folsom State Prison inmates since 1947.
As for Arkansas, Hardin said the state has historically used private companies such as Waldale to produce its license plates.
"While there are prisons throughout the U.S. that manufacture plates and have submitted bids to Arkansas in the past, the lowest bids remained those from private manufacturers," Hardin said.
With the latest bid from Waldale, the average cost for producing a single plate fell from $3.57 to $3.50 per individual plate. The per-plate manufacturing costs vary depending on the design, material and colors used.
While most of the plates and decals can be wildly popular -- such as the Susan G. Komen Breast Cancer plate, Fallen Firefighters, In God We Trust, and the Game and Fish Commission deer design -- a stockpile of about 85,000 unsold plates sit on the state's inventory shelves on any given day.
It was during a tour last year of the central storage area at the Department of Finance and Administration's Little Rock office state Rep. Justin Gonzales, R-Okolona, was inspired to take a closer look at the state's specialty license plate program.
"I just happened to be over there one day taking care of business and saw the plates stockpile," Gonzales said. "I asked what they had to do to order them and the process it took. The state is on the hook for the cost of those until they sell."
Hardin estimates the average start-up costs for a specialty plate to be about $20,000 for the plate design, initial order, inventory programming and distribution to the state's 134 revenue offices. Each year, the state also incurs about $750 per plate design to cover the ongoing costs of maintaining and updating the software required to process each plate.
Currently, the state will pay the full start-up and inventory costs if the organization can collect at least 500 signatures from individuals committing to purchase the specialty plate. In lieu of signatures, the organization can choose to pay a $5,000 design fee.
"If an organization collected 200 signatures, it would owe DFA $3000 for the 300 remaining signatures," Hardin said.
Some of the specialty plates, however, don't sell enough each year to cover the costs. The lowest-selling license plate in the system is from the College of the Ouachitas, a 1,200-student public community college in Malvern.
Messages left for Amber Childers of the Collage of the Ouachitas' advancement office weren't returned.
Only 17 of the college's license plates sold in 2018, which raised $425 for the institution. The state has about 987 College of the Ouachita plates in stock, which means if the selling trend continued, it would take about 58 years to deplete the inventory.
There are seven colleges or universities among the state's 10 lowest-selling specialty license plates. They include Northwest Arkansas Community College, National Park Community College, Mid-South Community College, the University of Arkansas-Fort Smith, the University of the Ozarks and Lyon College.
"The state at least needs to recoup their costs," Gonzales said. "If you're not selling at least 1,500 a year, the plate probably needs to go away."
Only 36 -- or 38 percent -- of the state's 94 specialty plates and decals sold more 1,500 license plates in 2018.
Gonzales was able to pass legislation this year, which goes into effect July 24, to lessen the impact the specialty plates have on the state coffers. The production costs -- including the design fee, inventory programming and distribution costs, and the initial order -- must be paid upfront under Act 297 of 2019. The new law applies only to plates approved Jan. 1 or after.
"It's not going to cost the state any money, and the state is not going to be subsidizing nonprofits any longer," Gonzales said. "It's still going to make the same money that they did before, but they just have to pay for it upfront."
There were only two specialty plates authorized in this year's legislative session: the Grand Lodge of Arkansas and the Prince Hall Grand Lodge of Arkansas. The plates' proceeds will be used to promote and support the Grand Lodge of Arkansas and the Arkansas Masons.
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