Court rules against governor's fees

Fees cannot fund general spending

[DEC. 1, 2004]  SPRINGFIELD -- A Nov. 29 decision by a Cook County Circuit Court judge against fees imposed on employers sends a clear message that the Blagojevich administration must rethink its tax-and-spend policies, according to state Sen. Bill Brady, R-Bloomington.

Circuit Court Judge Patrick McGann ruled that the governor's big increase in fees on business for workers' compensation insurance was unconstitutional and struck the fee increase down.

"This Cook County judge said fees can only be raised to cover the cost of government regulation or service -- NOT to pay for general government spending, which is what the governor has been doing," Brady said. "The court ruling could give all fee-payers grounds to challenge fee increases that fund general spending, and not just the regulatory program or government service the fee was collected for. It is also conceivable that fee-payers may be able to challenge the governor's penchant for raiding special funds that are funded by fees."

The 44th District senator says the Nov. 29 ruling covers only the workers' compensation fees, which were challenged in a lawsuit filed by the Illinois Chamber of Commerce, but the court's ruling is very broad and could set a precedent for court cases that could be filed to strike down some of the governor's other fee hikes, including fees on truckers and environmental permits. Lawsuits are pending on some of the other fees.

In the workers' compensation case, fees on businesses were raised by $19 million in the last budget year, fiscal 2004, but even more than that amount went to the state's General Revenue Fund for increased spending on Medicaid and other programs.

The judge said the workers' compensation fees could be used only to pay for the cost of the insurance program run by the Illinois Industrial Commission, which was only about $14 million last year.

"The judge's legal opinion mirrors concerns by lawmakers who earlier this year passed legislation reducing the workers' comp fees back down to the level needed only by the insurance program," Brady said. "With this court decision, businesses may be able to get a refund of the higher fees paid last year."

The General Assembly also scaled back some trucking fees, but Brady said lawmakers still need to reduce or repeal many other business and consumer fees that were hiked last year.

Altogether, the governor raised more than 300 fees last year, hoping to raise more than $400 million a year. His actual fee collections fell short of his projection, and he got only about $300 million, but he still managed to divert most of that $300 million of the increased fees to the General Revenue Fund. Almost one-third of that was from the higher workers' compensation fees.

"State government's role should be one of assistance, not interference; however, the last two years there has been an unfortunate shift in philosophy in Springfield. Our governor is trying to tax his way out of his penchant for spending -- which is only hurting business and threatening jobs," Brady said. "I am working for business, jobs and economic development."

This court ruling is expected to be appealed by the governor.

[Illinois Senate Republican Caucus news release]