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Phosphate and finance

Florida has little choice but to bankroll the $163-million cleanup of an abandoned mountain of acidic phosphate waste on Bishop Harbor, which is one reason even the industry supported the Legislature's decision last week to increase the severance tax.

The tax had been reduced just three years ago, but the cleanup fund it supports is being bankrupted by the escalating cost of removing acidic water from the Piney Point phosphogypsum stack, which was abandoned after the 2001 bankruptcy of Mulberry Corp.

The bill that lawmakers passed would raise the tax from $1.30 to $1.62 per ton of phosphate, generating an extra $8-million a year. It has some commendable features: a study of how the Peace River Basin is being harmed by phosphate mining; authority for the state Department of Environmental Protection to enact rules to consider cumulative harm to the Peace River; and more financial reporting requirements for phosphate companies.

Less clear is whether lawmakers also intended to undermine an effort by DEP to eventually require financial bonds or insurance for companies that seek to build new waste stacks. DEP hired a Florida State University finance professor who has called for an overhaul of the financial standards, and the department has been holding hearings to gather public input. Will the new bill allow that process to continue to go forward?

The increased tax is just a start, of course. The problem at Piney Point is that the state knew for six years that Mulberry was struggling, but was content to accept unaudited financial statements that revealed nothing. If the state doesn't require real financial protection in the future, then it is only inviting more disaster.

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