CHICAGO - The cash-strapped Chicago Public Schools is pushing off release of its fiscal 2016 budget and considering $1.1 billion of tax anticipation and note borrowing through new credit lines as it struggles to stay afloat.

The district, pushed down to junk status by Moody's Investors Service last month, must close a $1 billion deficit in its next budget that begins July 1, driven in large part by its growing pension contributions that will consume $700 million of its budget.

The district owes a $635 million payment before the end of the month. A new consultants' report found that the district is in danger of exhausting cash for operations by the autumn due to payroll, pension, and other bills coming due.

The new borrowing and budget delay comes as the district is pressing for state help with its pensions and awaiting the results of the state budget showdown. That assistance has so far fallen by the wayside as new GOP Gov. Bruce Rauner and the General Assembly's Democratic legislative majority are locked in a state budget impasse. Rauner previously told the district that no bailout is coming and called the district a good candidate for Chapter 9, even though the state has no general municipal bankruptcy law.

"CPS faces a $1.1 billion budget deficit that is the result of shamefully low state education funding and a broken pension system that penalizes Chicago taxpayers and our city's children," said Jesse Ruiz, interim chief executive officer of the district. "In just two years, CPS has paid more than $1 billion for pension costs. And while the district has made every effort to balance past budgets without touching classroom spending, if Springfield does not take action, that may no longer be the case."

Ruiz said the report shows CPS is running out of cash, and that's why the district is looking to credit lines "to enhance cash flow management."

One item on the Wednesday's board of education agenda would authorize $935 million of tax anticipation warrants and notes and another would authorize $200 million of tax anticipation notes. Officials said the borrowing would be done in new short-term credit lines. The $200 million one goes through fiscal 2015 and the larger one through fiscal 2016. Officials couldn't provide any additional information on the borrowing.

In addition to the line of credit, CPS may need to make additional budget cuts while it continues to work in Springfield to change the dual taxation system that forces Chicago residents to pay for both their own teachers' pension and those in other districts, officials said.

CPS is contemplating using the larger line, as it has used previous lines of credit, to stabilize funding over the course of the year as its cash flow fluctuates.

The district has traditionally released its budget in June, and the Chicago Board of Education has approved it in July.

The district paid a steep penalty to borrow in April when it sold $300 million of general obligation bonds. The top yield of 5.63% on a 25-year maturity landed 285 basis points over the Municipal Market Data's triple-A benchmark. The pricing followed a delay driven by downgrades, leadership turmoil, and Rauner's bankruptcy comments. Barbara Byrd-Bennett resigned June 1 after being placed on leave when it was disclosed federal authorities are probing her role in a no-bid contract.

Moody's Investors Service last month stripped the Chicago Board of Education of its investment grade rating, one day after doing the same to Chicago. The board's $6.2 billion of debt was lowered to Ba3 with a negative outlook.

Downgrades earlier this year by Fitch Ratings and Moody's below the BBB level triggered swap termination events that could, under terms of the swap contracts, force payments of nearly $230 million to swap counterparties. The district has 10 interest rate swaps on a notional amount of $1.1 billion. The district has $9.5 billion of unfunded pension obligations.

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