AUSTIN, Texas — Midland Independent School District has filed a new legal challenge to Texas’ school finance system, renewing debate over the state’s recapture program, commonly known as “Robin Hood,” which redistributes property tax revenue from wealthier districts to those with fewer resources.
The district’s board voted this week to sue Texas Education Commissioner Mike Morath and other state officials, arguing that changes to the school funding system have reduced local control over taxation and spending. Texas courts have previously upheld the constitutionality of the recapture system in rulings issued in 1995, 2005 and 2016.
Created in 1993 after a school finance lawsuit led by the Edgewood Independent School District, the recapture system requires property-wealthy school districts to send excess local property tax revenue to the state. The state then redistributes those funds to districts with lower property wealth.
According to the Texas Education Agency, 225 school districts contributed nearly $3 billion through recapture during the 2024-25 fiscal year, up from just over $1.4 billion a decade earlier.
Austin ISD made the largest payment during the 2024-25 school year, contributing more than $770 million, followed by Pecos-Barstow-Toyah ISD at about $198 million. Midland ISD ranked sixth, sending $92.4 million to the state, while Houston ISD contributed $55.5 million.
Midland officials argue that despite the district’s property wealth from oil and gas, many of its students come from low-income households. About 68 percent of students are Hispanic, and nearly 55 percent qualify for free or reduced-price meals.
The lawsuit contends that legislative changes since 2019 have shifted authority over school tax rates from locally elected school boards to the education commissioner while continuing to restrict how districts spend locally generated revenue.
Supporters of recapture argue the program helps reduce funding disparities between property-rich and property-poor school districts. Critics, however, contend the state relies on recapture to offset its own education funding responsibilities, leaving some districts struggling financially despite rising local tax collections.
The lawsuit also comes as Texas leaders continue debating broader property tax reforms. Gov. Greg Abbott has called for eliminating school property taxes, a proposal supported by several Republican lawmakers and conservative groups. Fiscal experts, however, have warned that replacing the revenue generated by school property taxes would be costly because local property taxes remain the primary source of funding for Texas public schools.
Midland ISD is represented by attorneys Kevin O’Hanlon and Kara Belew. O’Hanlon previously represented the Texas Attorney General’s Office in the landmark Edgewood v. Kirby school finance case, while Belew previously served as Texas’ state budget director, a senior Texas Education Agency finance official and a policy adviser for the Texas Public Policy Foundation.
