CHICAGO (November 30, 2004) — In a victory for the Illinois State Chamber of Commerce, Circuit Court Judge Patrick E. McGann ruled today that a State of Illinois surcharge imposed last year on Illinois employers was improper. In April 2004, the Illinois State Chamber of Commerce filed suit against Illinois officials challenging the constitutionality of a surcharge on worker's compensation insurance premiums included in a package of increased business fees that the Illinois Chamber believed unfairly burdened business in order to balance the state’s budget. McDermott Will & Emery represented the Illinois Chamber.
In its role as the voice of Illinois' employers, the Illinois Chamber asked the Cook County Circuit Court to strike down the new surcharge paid by Illinois employers and the mechanism by which excessive fees are used to raise general revenue. In 2003, the governor and Illinois General Assembly imposed the surcharge as part of a program of employing new or increased user fees to raise general revenue rather than to pay for the cost of the program related to the fees. The lawsuit charged that targeting the fee increases at businesses violated the Illinois constitution's requirement that taxes and fees be applied uniformly.
"The court's decision addresses the fundamental distinction between fees and taxes," said Douglas L. Whitley, president and CEO of the Illinois Chamber. "If the General Assembly decides it needs additional funds for general purposes, it should be up front about it and enact a tax increase." The Cook County decision addresses an issue of national importance because many states have turned to increased user fees as a method of raising general revenues.
The McDermott legal team representing the Illinois Chamber was led by tax partners Thomas Donohoe and Jane May, and included M. Miller Baker of the Firm's Washington, D.C. office.
The Illinois State Chamber of Commerce promotes the interests of Illinois business by working to improve the state’s business climate. The Illinois Chamber aggressively advocates legislation and public policies that support economic growth, and is a source of timely and reliable information on matters important to its members, Illinois employers and the general public. The Illinois Chamber also provides, to its more than 3,500 members, effective programs and services that meet their business needs, including immediate answers to legal and human resources concerns and access to training and consulting services.