I'm not sure what the problem was with my code that I pasted above, but I got this code to work. So anyone looking to do the same thing I'm doing...here is some code that works.
header("Content-type: image/png");
$im = imagecreatefrompng ("Legaloval20.png");
$black = imagecolorallocate($im, 0, 0, 0);
//$text = $_GET['text'];
$text = "Skip";
$text2 = "Spaces";
$font='fonts/ariblk.ttf';
$size = 14;
// x y
imagettftext($im, 12, 12, 150, 122, $color, $font, "Skip");
imagettftext($im, 12, 12, 138, 149, $color, $font, "2 Spaces");
imagepng($im);
imagedestroy($im);