A big pending tax increase on Hawai'i businesses is being reduced under a measure quickly moving toward becoming law.

The bill, which passed its final committee yesterday, would reduce the average tax hike from $1,070 to $630 per employee this year. Businesses currently pay an average of $90 per employee.

The larger tax increase was called for using a complicated formula designed to ensure that unemployment funds keep flowing to the jobless.

The state is spending about $30 million a month on unemployment benefits. The proposal moderates the tax jump and borrows money from the federal government to keep unemployment funds solvent.

State officials want the bill to become law by March 12, before businesses get their tax bills.

ROADWORK GETS $125.7M IN FEDERAL FUNDS

The state Department of Transportation, together with the four counties, has committed $125.7 million in federal stimulus funds for highway improvement projects.

The money is being used for 23 road projects statewide, all of which are currently under way, the DOT said in a news release.

The projects were selected by the counties and state based on federal guidelines which included geographic distribution, projects in economically distressed areas and projects that were "shovel-ready."

All states were required to have the federal stimulus funds fully committed by Monday.

KAUA'I BUYS LAND FOR AFFORDABLE HOUSING

A long-range plan by Kaua'i County to develop more affordable housing took a step forward yesterday, with the acquisition of 75 acres in 'Ele'ele.

Major Kaua'i landowner Alexander & Baldwin Inc. sold the parcel to the county for $2.5 million, which the county said was below market value. The difference in market value and the price was treated as a donation to the county.

The purchase price was approved by the County Council in December. The sale closed yesterday.

The property is adjacent to an existing affordable housing community of Kaua'i Habitat for Humanity called 'Ele'ele I Luna.

Kaua'i County said developing homes on its site will be a long-range process. The next step will be producing a master plan through planning consultant R. M. Towill with input from the community in West Kaua'i.