CHICAGO - Illinois Gov. Jim Edgar and state legislative leaders have agreed to make it possible for Chicago's schools to open tomorrow by waiving the balanced budget requirement for the financially troubled Chicago Board of Education.

The waiver would give lawmakers until Sept. 12 to put together a bailout plan for the school system.

Mike Lawrence, spokesman for Edgar, said the legislature was expected to vote on the agreement Friday afternoon.

Lawrence said the agreement requires the governor, Senate president James Philip, R-Wood Dale; Senate minority leader Emil Jones, D-Chicago, House Speaker Michael Madigan, D-Chicago; and House minority leader Lee Daniels, R-Elmhurst, to resume negotiations today with the rest of the legislature, which returns to the Capitol on Thursday.

Steve Brown, spokesman for Madigan, said the speaker was confident" that the agreement was the only measure that could be approved on Friday, given the "divergent point of views" on a $300 million bonding plan to bail out the school system. The plan was proposed by Mayor Richard M. Daley of Chicago last month.

The agreement to temporarily waive the school system's balanced budget requirement and any final bailout plan would require a three-fifths majority of the legislature to become effective immediately.

Still, the opening of schools tomorrow faces another obstacle. Though the agreement would allow schools to open without a balanced budget, Chicago teachers and the board still must reach a consensus in their negotiations or agree to return to work without a contract, state officials said.

Officials from the board and teachers union could not be reached for comment on Friday.

The school system shut down Sept. 1, the start of fiscal year 1994, because the board did not balance its budget by that day, the state-required deadline. Debt service payments were not affected by the shutdown.

The Chicago School Finance Authority, the board's financial oversight panel, on Aug. 31 rejected the board's budget because it was not balanced. The board faces a $299 million deficit in its $2.8 billion fiscal 1994 budget.

Because the board failed to come up with a balanced budget by the deadline, the board must abide by a list of provisions under state law.

The provisions require the board to submit a three-year financial plan, and prohibit the board from making any payments or incurring any obligations until a balanced budget is approved by both the board and the school finance authority.

In addition, the law also empowers the school finance authority to approve all board contracts, approve the school system's chief financial officer, require the board to establish separate fund accounts, and direct the board to reorganize its financial accounts, and management and budgetary structure.

But Lawrence said that the provisions conceivably can be "waived, relaxed, or eliminated" as part of any final bailout agreement reached by state lawmakers.

Last month, Daley unveiled a bailout plan that called for the issuance of $300 million of general obligation bonds by the school finance authority. About $120 million would be allocated to the fiscal 1994 budget, and the remainder to the fiscal 1995 budget under the plan.

The remaining $179 million gap in the school system's fiscal 1994 budget would be filled by union concessions, budget cuts, pension fund transfers, and other funds.

However, Senate Republicans have proposed decreasing the amount of bonding to the $250 million range and eliminating the diversion of $55 million of teacher pension funds to balance the school system's budget.

In addition, the Republicans have called for a pilot school voucher program that would include private schools in Chicago and an expansion of powers by the school finance authority.

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