MARLBORO COUNTY — When the Marlboro County School Board met Monday evening, members heard a presentation from interim Superintendent Michael Thorsland discussing how the district can get to a balanced budget while ensuring special education students remain a priority, despite the state’s continued oversight of the district’s finances. Challenges he says the district is facing are declining state and local revenues, made worse by rising expenditures, particularly in special education needs.
Special needs students in the budget
Thorsland began his comments by responding to an earlier statement made by the father of a child with autism sharing his concerns that a balanced budget by the board might result in students like his falling through the proverbial educational cracks.
“We realize the priority that they [special needs students] are, and the state does provide additional funding for students that have special needs. So, we want to honor that and make them an important part of our budget, just like all the other students,” Thorsland said.
Not included in the budget are over $1 million in special education contract costs because the district is using staffing agencies due to recruitment difficulties.
“We have to have a certain number of teachers for a certain number of special education students,” Thorsland said. “Sometimes we can’t find those teachers, and we have to rely on companies to do that.”
Thorsland mentioned that federal special education funds exist, but the district has already spent them, making using monies from the general fund a necessity.
“We do get a good bit of money from the federal government that is designated to special education, but this would be an overage of that amount. So, we have spent all the money that the federal government gives us for special ed and this is over and above that amount,” Thorsland said, indicating the over $1 million in contract costs.
Operating under state oversight
“We are in a unique situation where the state department has financial oversight, but the school district is still operating somewhat independently. While the state department currently controls financial operations, the Marlboro School Board is the entity that does approve the budget for its local tax implications,” Thorsland explained, adding the school board is also tasked with making decisions that will affect local taxes and millage.
“There is state funding but as far as setting millage, I don’t think there is any law or protocol for the state department to set local millage in Marlboro County,” Thorsland continued, pointing out it is still decided by the local school board. “The state mainly wants to see a balanced budget.”
According to Thorsland, the district’s fund balance is projected to be “very low” by the end of the fiscal year, making it critical for the district to concentrate on rebuilding financial reserves moving forward.
Expenditure increases
Pointing out that the district is still two and a half months away from the end of the school year, Thorsland cautioned the projected expenditure of $43,571,173 is an estimate, but he believes an accurate number for what the district is on track to spend.
He added, “If I go back, $42,781,662 was approved in the budget. I think it’s going to be close to a million dollars more than that.”
According to Thorsland, going back to 2021 and coming out of COVID, the district’s spending ballooned to a roughly 30% increase up to $31 million, to $40 million, and then to almost $46 million.
“It came down a little bit in 2024-2025 and we do think it’s coming down. So, $1.8 million reduction from 2024-2025 to 2025-2026 is projected, but it’s still well above revenues which has caused the fund balance difference,” Thorsland said.
Revenue declines
The district is projecting a decline of approximately $800,000 in state revenue this year, a cutback Thorsland attributes to changes in enrollment. Local revenue is expected to drop by more than $900,000, largely due to the loss of funds from a fee-in-lieu-of-taxes agreement, Thorsland said.
That agreement—commonly known as a FILOT—allows companies to pay a fee instead of traditional property taxes. Distribution of those funds is coordinated by county council, and Thorsland said last year the school district did not receive its allocation.
“That significantly reduced the amount of revenue we’ve seen in the district this year,” he said. “And that’s increased our struggles.”
Over the past two years alone, the district has experienced an estimated $1.5 million reduction tied to declining FILOT revenue.
Transparency concerns
Some board members stressed they were not made aware of financial discrepancies earlier and questioned why the board was only now being informed, months after last year’s budget was passed and the state assuming control of the district’s finances.
Thorsland candidly answered he did not feel the board was fully informed at the time the 2025-2026 budget was passed by the district, saying “I don’t think you were given the information properly that you needed. You approved a budget with the information you had. I don’t think you had enough information to make a good decision last year.”
Thorsland added he felt state oversight helped prevent even greater spending.
“If the state hadn’t stepped in, I think the expenditures this year would have been closer to $45 million,” Thorsland said. “In some ways, it stopped the bleeding.”
Despite making layoffs, pay cuts, and consolidations since December 2025, Thorsland says most of the financial savings from these actions will not take effect until the next fiscal year, beginning July 1.
“The overwhelming majority of the changes you’ve made since December are being implemented July 1,” Thorsland said. “We won’t see those savings this fiscal year.”
Projected expenditures for the current year now stand at approximately $43.6 million—nearly $1 million above the approved budget. Thorsland shared his concern with the board that the district may actually be facing a deficit closer to $2.5 million once all factors are accounted for.
Looking ahead
District officials said they will provide detailed breakdowns of cost-saving measures already taken and outline concrete options during the first budget reading in May.
“A budget is a plan,” Thorsland said. “If the backup’s not there to prove what we’re going to spend, it’s just words — As far as the plan for next year,” Thorsland said, “it’s going to be a whole lot better.”
The district said it plans to present a proposed budget to the South Carolina Department of Education on May 15, and will hold its first reading on May 19, followed by a public hearing and second reading on June 1. A third and final reading is expected June 15, with June 29 reserved as a contingency date.
“This is not a full budget presentation tonight,” Thorsland cautioned. “But we do plan to have a budget to you for approval on this schedule.”