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Hawaii’s , which pays out unemployment checks, is back in the black after borrowing federal dollars since December 2010 to cover benefits payments.

The state owing more than $1 million in interest to the federal government on $163 million worth of loans taken out from December through September.

But Hawaii taxpayers are only on the hook for $211,000 in interest for loans taken out in December, according to the Hawaii . An additional $371,000 in accrued interest for loans taken out since January will be waived if the state does not take out additional federal loans between Oct. 1 and Dec. 31 of this year.

The state pays out about $5 million in unemployment benefits each week through the fund, which is filled through payroll taxes paid by employers. The state’s unemployment rate was at , meaning 40,250 people were unemployed that month.

Because employer contributions to the fund are only due quarterly, the state Labor Department expects the fund to be in jeopardy come December, according to spokesman Bill Kunstman.

Updated To avoid having to borrow more federal money, the department will be able to tap a line of credit through the state’s general fund. Gov. Neil Abercrombie approved raising the pre-existing credit line earlier this year¹. Meanwhile, because unemployment taxes cannot be used to pay interest, lawmakers approved interest to be paid through the .

“If there’s any point where our balance is going to go into the negative, instead of taking a loan from the feds, we have a line of credit, basically, which the max is $10 million,” Kunstman told Civil Beat. “Any incoming taxes go back to the general fund.”

The trust fund got into trouble following an unemployment insurance tax holiday lawmakers approved in 2007, when the fund’s reserves were at a record-high of more than a half-billion dollars. When the recession hit, Hawaii’s unemployment rate spiked, and the fund’s reserves dried up, triggering a tax increase for employers.