The Indiana Department of Education has approved a request from two local school districts to borrow money from the Common School Fund to cover tax collection shortfalls in Lake County.

The School City of East Chicago will borrow a little more than $2.7 million. The Merrillville Community School Corp. will borrow $267,000.

Avon Waters, spokesman for the state agency, said they are short-term loans at a 1 percent interest rate that have to be repaid in 36 days.

Most Lake County school districts and municipalities did not collect 100 percent of the revenue from 2006 payable 2007 property taxes. County officials have said part of the problem is an escalating rate of home foreclosures and people who did not pay their property taxes.

Merrillville schools Superintendent Tony Lux said the district needs the common school loan to make up the difference for basic expenses.

"Merrillville only received 93.5 percent of its property taxes at the end of 2007," Lux said. "The law allows a loan to replace up to 95 percent of its property taxes. The difference for Merrillville is about 1.5 percent and amounts to $267,000. This money is receipted to the general fund for operation costs."

East Chicago school officials could not be reached for comment.