Chicago Public Schools officials say the possibility of a state  budget without any money for building and repairing schools would leave the city's school district with big problems.

"If we lose that capital expenditure money, it would be devastating," CPS Chief Arne Duncan said Wednesday.

That scenario was left hanging over the district on Tuesday after a call by Illinois Gov. Rod Blagojevich for legislators to return to Springfield and begin work on a new budget.

Blagojevich rejected a budget passed in late May by the state legislature because the proposal was not balanced. Any new budget is certain to be squeezed down even further.

Legislators had agreed to a 2009 budget that would have included $1.9 billion in funding for Chicago schools, an amount that included a $98 million increase  - $58 million of which came after Duncan and Board president Rufus Williams made a trip to Springfield last month to appeal to legislators.

Originally, CPS had asked for $180 million in additional funding to help cover increased teacher salaries, capital expenditures and new program funding.

Now school officials don't know what to expect.

"It's a moving target in Springfield," Duncan said.

Of most concern to CPS is capital funds. The district spent approximately $400 million on capital improvements in 2007, according to chief financial officer Heather Obora.

According to Duncan, the district's capital funds have come entirely from property taxes, bank loans and reserve funds for the past four years. The district used to receive $100 million annually from the state just for capital expenditures, he said.

This year, the legislature had planned to allocate only $110 million in capital funds for the entire state, Duncan said.

Wednesday, the Board of Education approved $74.2 million in capital projects, funded out of the 2008 budget.

The projects include $22.5 million for an addition at Juarez High School at 2150 S. Laflin St.; $3.5 million for renovations at Spencer Math and Science Academy at 214 N. Lavergne Ave.; $3.6 million to renovate Parkside Community Academy at 6938 S. East End Ave.; and $2.6 million to renovate Harper High School at 6520 S. Wood St. 

Williams says CPS will use $50 million of its reserves to cover half the cost of a 4 percent increase in teachers' salaries mandated under the district's new contract with the teachers' union.

Beginning July 1, the district will be on a temporary budget until the 2009 budget is finalized and approved, CPS spokesman Michael Vaughn says.

Under the Illinois school code, CPS must approve a budget by the end of August.

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