By Mary Wisniewski

CHICAGO (Reuters) - A Chicago Teachers Union official said on Thursday the union has broken off contract talks with the public school system but it was too soon to say if there would be a repeat of the 2012 strike.

Union Vice President Jesse Sharkey said it was now "highly unlikely" an agreement would be reached before the current contract expires on Tuesday. Sharkey said the union will talk to Chicago Public Schools in the future, but for now the two sides are at an impasse.

"Nothing is off the table," Sharkey said, when asked about a possible strike. "We had hoped to be able to make a deal."

Getting to a new contract without another strike will be a major test of Mayor Rahm Emanuel's second term.

The school system, which serves 400,000 students, is facing a $1.1 billion deficit in its upcoming fiscal 2016 budget that has been delayed due to a state budget impasse, although Illinois Governor Bruce Rauner signed a school funding bill into law on Wednesday.

A spokesman for Chicago Public Schools was not available for comment. The district has typically declined comment on contract negotiations.

Union President Karen Lewis told the Chicago Tribune that the district has talked about mass layoffs and budget cuts.

Talks between the union and the schools have at times continued past the expiration of the contract deadline, Sharkey said. The real pressure is to get a contract before school is set to reopen in the fall, he said.

Sharkey said Chicago teachers had been willing to accept a salary freeze but only if the district would agree to improvements at the schools, including cost-free changes like limits on standardized tests and paperwork.

In a statement, Emanuel urged the union to return to the bargaining table and said he was encouraged that both sides acknowledge the schools cannot provide a pay hike.

"After years of our academic gains, now is not the time to shortchange our children by eliminating evaluations for tens of thousands of employees or lowering teachers' performance standards," Emanuel said.

Bad feelings between Emanuel and the teachers' union run deep, from the seven-day 2012 strike, the district's first in 25 years, to a decision to close 50 schools in 2013 and more recent differences over testing.

The Board of Education on Wednesday approved two sets of borrowings that total $1.13 billion, aimed at boosting the district's cash flow.

(Reporting by Mary Wisniewski; Editing by Eric Beech)