Coughlin, Eustace, Sumter & Wimberly Bill to Allow Ads on State Websites to Help Ease Taxpayer Burden Continues Advancing

The full Assembly on Thursday approved legislation sponsored by Assembly Democrats Craig Coughlin, Timothy Eustace, Shavonda Sumter and Benjie Wimberly to allow some state agencies to sell Internet advertisements on their websites to test whether they can help ease taxpayer burdens.

“The purpose of the bill is common sense – to provide new sources of revenue for the state, particularly for state agencies that maintain high-traffic web pages,” said Coughlin (D-Middlesex). “This is 2016. Consumers are used to seeing advertisements on websites, so we’re not breaking new ground here. In fact, if anything, New Jersey government is behind the times when it comes to not generating revenue from its websites. The bottom line is this – we should be doing anything we can to ease the burden on taxpayers.”

The bill (A-1930) authorizes the Economic Development Authority and the New Jersey Lottery to establish a three-year pilot program to sell Internet advertisements for display on the agency’s websites.

“Let’s see if it works,” said Eustace (D-Bergen/Passaic). “Even if it’s not a large windfall, every dollar counts when it comes to finding savings for taxpayers. This is a sensible concept that could prove beneficial to taxpayers, with no downside besides a few ads on a website, which we’re all used to seeing at this point. This makes sound fiscal sense.”

Each agency’s website must include a disclaimer stating that the advertisements do not imply endorsement by the state.

The bill stipulates that each agency must develop policy, style, and content guidelines for website advertisements that ensure that the subject matter of the advertisement directly relates to the agency’s business mission and purpose. Revenue generated will be deposited into the State General Fund by agencies for which expenditures are authorized through the annual appropriations act. For agencies not provided for through the annual appropriations act, the agency will remit to the State Treasurer such revenue generated from the sale of Internet advertisements as remains after deductions by the entity for the incremental cost of offering Internet advertisements and of an additional ten percent of such revenue for the purpose of innovation in operations, programs or services.

“This is definitely a venture worth pursuing, especially if you look at it from a cost-benefit analysis perspective,” said Sumter (D-Bergen/Passaic). “The risk to exploring this type of venture, which has proven to generate revenue for other states, is virtually nil. So, why not give it a trial run at least to see if it can help ease the burden on taxpayers if launched on a much larger scale.”

The bill requires each agency, not later than three months after the conclusion of the pilot program, to submit a detailed report to the Governor and the Legislature evaluating the effectiveness of the program, including a summary of expenditures and revenues under the program, together with recommendations concerning whether to continue the program. The purpose of the bill is to provide new sources of revenue for the State, particularly for State agencies that maintain high-traffic web pages.

“This is an avenue worth exploring if it can help the state generate additional revenue without burdening taxpayers,” said Wimberly (D-Bergen/Passaic). “If it proves fruitful for us, as it has for other states, it could be worth expanding across all state agencies to further boost revenue.”

The sponsors noted other governments have had success with such programs.

The Massachusetts Bay Transit Authority noted informally that the gross revenue produced on MBTA.com for the June 1, 2011 to May 31, 2012 fiscal year was $84,000 and that monthly earnings range from $4,000 to $9,000. The MBTA received 76 percent of gross revenue, or approximately $56,000, and the private company managing the advertising received 24 percent of the gross revenue, or approximately $28,000.

The bill was approved by a vote of 72-0-1 and now heads to the Senate for consideration.