You are right, and I don't know why you were downvoted: this is the claim that would be made, and it would be asserted as the reason you are not allowed to take your blue-on-white license plate and repaint it to be hot pink on lime green (at least, not while it's mounted to your vehicle).

However, I don't think this idea will go anywhere, since it potentially creates all sorts of first-amendment issues - you love coke but your plate keeps showing ads for Pepsi, as it were; as DMV is a state agency they are subject to constitutional limitations, and as the owner/occupant of a vehicle people are inevitably going to associate any license plate messages with you, so forcing you advertise something you don't like (or indeed to advertise at all) is arguably an infringement on your freedom of speech.

I'm all for creativity and lateral thinking, but I think this is a really, really stupid idea - it's straight out of Idiocracy. The sad irony is that while the idea is a suggestion for balancing the state budget, it's taking up resources being proposed and debated in the legislature, and if it passes it will take up resources in the conduct of feasibility studies.