ILL. JUDGE RULES COMP FEE HIKE IMPROPER:

December 20, 2004

An Illinois Cook County circuit judge has ruled that a state increase in fees paid by employers into the state’s workers compensation fund was improper because it was used to help plug a gaping hole in the general revenue fund. The fee hike, one of dozens targeting Illinois businesses passed by the Democratic-controlled state government in an attempt to balance the budget while avoiding income tax increases and government spending cuts, has brought in as much as $30 million. The Illinois Chamber of Commerce has estimated that it only costs $14 million for the state to administer the comp fund with the rest going into the government’s coffers. The fee requires insured employers to pay a 1.5 percent premium tax on their workers comp policies; self-insured employers must contribute 0.045 percent of annual wages. The governor’s budget office will appeal the ruling, handed down by Circuit Judge Patrick E. McGann.