There’s good news on the economic front: Hawaii has fewer unemployed, and more money to protect those who are.

The state’s unemployment rate improved to 3.5% in September from 4.3% at the end of last year. At the height of the COVID-19 pandemic in 2020, it went as high as 22%.

Meanwhile, the Unemployment Compensation Trust Fund (UCTF) — which had a negative $646 million balance in 2020 — has been replenished to the tune of $232 million as of Nov. 4, according to the state Department of Labor and Industrial Relations (DLIR).

That’s better than expected, but it’s just a little more than one-third of the fund’s pre-pandemic balance of $601 million, which quickly evaporated when COVID-19 hit.

Reaching a healthy balance will require a healthy economy with low unemployment and, more crucially, with thriving businesses, which fund the UCTF through payroll taxes.

Fortunately, the economic forecasts are reasonably good, assuming there’s no major COVID resurgence or a deep recession in the near future.

But there remains a major piece of unfinished business: replacing the DLIR’s infamously outdated claims system, which nearly collapsed under the burden of thousands of suddenly unemployed people, forcing them to wait weeks or months for desperately needed benefits.

In June 2021, the state awarded an amended contract to Solid State Operations Inc. for a state-of-the-art web-based system, to go live by October of this year. Unfortunately, that didn’t happen.

“The state cancelled the contract due to an unforeseeable lawsuit between the contractor and the sub-contractor that impacted the project, as both contractors’ work was integral to the overall success of the project,” according to DLIR spokesman William Kunstman.

The state spent about $1 million based on milestones met, and hopes to retain some of the work already done. Meanwhile, Gov. David Ige reallocated $42 million in pandemic funding toward a new effort, and a new request for proposals is expected to be released in January, DLIR said. When the new system will be up and running, however, has not been determined.

We can only hope that DLIR’s creaky old system — which has been shored up with about $5 million in federal funding — will be adequate until the new system is in place.

At the moment, it seems that we’re OK. But the state will need to proceed with determination.

After all, when 2020 dawned, everything seemed OK, too.