...As If Flight Schools Didn't Already Have Enough
The State of Florida, like most, is facing a
budget crunch, and it's turning to every possible venue to raise
its fees and taxes. Some of those efforts may be counterproductive,
as recent clamping-down on flight schools in Naples (FL) could
demonstrate, very soon.
The state requires Workman's Compensation insurance to be
carried by a variety of employers, flight schools among them.
Flight schools have often, and typically, not been affected by
this, as they often employ independent contractor CFIs to do that
work. The CFIs (not the schools, per se), would be
required to provide any Workman's Compensation insurance -- if
indeed they were required to carry it.
The State doesn't think that's right, and has, in the past month
or so, closed all the flight schools in the ritzy southwest-Florida
The schools say two things: that they aren't required to
purchase such coverage; and/or that they simply cannot get it,
except -- of course -- from the State, which charges -- of course
-- three times what private carriers used to.
Private companies are pulling back from insuring flight schools,
especially since September 11 of last year, because of a perception
of increased risk. Meanwhile, [Workman's Comp]
insurance-industry-wide, the private companies are, they say, are
paying out a buck and a quarter for claims, for every premium
dollar they take in. That figure, coupled with the paranoia that
now surrounds flight training, has caused private companies to
simply stop writing WC insurance.
things look juicy for the State, which requires the insurance and
is now the only underwriter. The problem is, the State won't
collect its exorbitant levies; and it may get stuck with paying
displaced flight school workers (including those CFIs) Unemployment
Compensation. [If the CFIs can't be 'independent contractors' for
the purpose of WC, then they must be covered by UC, right?
State sees more money, just over the hill...
The State also is assessing fines. One flight school, which has
recently seen its insurance on its airplanes rise to $250,000 a
year, is looking at an addition quarter million in WC insurance --
on top of $168,000 in WC fines. With the school's already operating
near the financial edge, if the State pushes a little harder, there
won't be a flight school there, at all -- and there won't be any
(aircraft) insurance payments made; and there won't be any fines
collected; and there won't forty or so people employed, as there
were, a month ago, when the most-recent vendetta started.
R. Scott Cameron, ATP, the AOPA Airport Support Network
Volunteer in Naples writes ANN, "We have recently had all
three of the flight schools at Naples Municipal Airport (KAPF)
grounded because of a situation with the Department pertaining to
Worker's Comp. Insurance. As this is a situation that can affect an
already troubled industry, I might suggest that you get the word
out to our CFIs. It is very hard on our airport budget and impacts
our local economy."
Meanwhile, airports hosting flight schools of any size at
all will be feeling the crunch. Tie-down and hangar fees, fuel,
oil, services -- all are hit by the grounding. The ultimate losses
of jobs will hurt the local, and eventually the State, economies,
as well, when payments get missed, homes get foreclosed on,
and formerly-productive workers go on the dole.
The state 'understands.'
Naples News noted Saturday, "'They [the flight
schools] can reopen their doors once they obtain coverage and
can show proof of coverage, and pay the fines,' said Tami Torres, a
spokeswoman for the state Department of Financial Services in
Tallahassee." See? The State is always ready to be reasonable, and
to help. [There's some cynical logic in play: if the airports can
be forced out of business, the government can finnaly sell the land
to the best-connected developers, making some 'important people'