AUSTIN—The head of the Texas Workforce Commission says the state may need to seek a federal loan to maintain the unemployment compensation trust fund.

Chairman Tom Pauken says with more people losing their jobs, that a “real deficit” could come by September of October.

The update comes as Texas lawmakers debate expanding unemployment benefits.

“It’s just a bad situation,” Pauken said in a story for Saturday’s San Antonio Express-News and Houston Chronicle. But everyone will continue to get their benefits, he said, as Texas plans to deal with the potential shortfall problem in advance.

Texas had 26,071 initial claims for benefits during the week of Feb. 14, compared with 11,226 initial claims for the same period one year ago.

Texas could obtain an interest-free loan from the federal government to keep the state fund solvent, Pauken said. After that, Texas could issue bonds, with a tax increase on businesses to pay for the financing, he said.