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A tale of two districts and the question of local control
- Jul 24
- 5 min read
Two Texas school districts are facing very different challenges this week, but both point to the same underlying question: How much control should local communities have over their public schools?
In West Texas, Midland ISD is preparing to challenge the state’s school finance system in court, arguing that the recapture system has evolved into an unconstitutional statewide property tax. Hundreds of miles away, Austin ISD has abandoned its latest effort to avoid a possible state takeover, potentially leaving the future of three struggling middle schools, and the district itself, in the hands of TEA.
Midland ISD takes aim at recapture
Out in the red plains of West Texas, Midland ISD’s board voted unanimously this week to move forward with a lawsuit challenging Texas’ school finance system, becoming the first district in years to launch a significant legal challenge to the state’s recapture program, commonly referred to as “Robin Hood.”
Under recapture, property-wealthy school districts are required to send a portion of their locally collected property tax revenue back to the state, where it is redistributed through the broader school finance system. The program was created to reduce funding disparities between districts, but critics argue it has expanded far beyond its original purpose and makes “property-wealthy” districts shoulder the burden of the state’s inadequate funding in general.
Midland officials say the district is expected to send approximately $83 million in recapture payments to the state this year and has contributed more than $1 billion since 2013. Despite being classified as “property-wealthy” because of its tax base, nearly 60% of Midland ISD students are economically disadvantaged, a reminder that property values do not necessarily reflect the needs of the students who attend their schools.
Unlike previous lawsuits that challenged whether the Texas school finance system provided districts with adequate or equitable resources, Midland’s case is expected to focus heavily on changes made by HB 3 in 2019. District leaders argue that the state now exercises so much control over school property tax rates and recapture payments that local trustees no longer have meaningful discretion over the money collected from their own communities.
According to the district’s argument, the state education commissioner effectively determines the tax rate districts must adopt while the school finance system determines how much of the resulting revenue they may retain. Midland officials contend that this leaves local boards acting as tax collectors for the state and transforms what is presented as a local property tax into an unconstitutional statewide property tax.
The Texas Constitution prohibits the state from imposing its own property tax, and Midland ISD is expected to argue that the current structure crosses that line. The district’s challenge will be filed in Travis County and could become the first major lawsuit against the state’s school finance system since the Texas Supreme Court upheld the previous structure in 2016.
A successful challenge would have far-reaching consequences for the more than 200 Texas school districts that currently make recapture payments. A ruling against the state could therefore force lawmakers to reconsider major parts of the system, including the relationship between local tax rates, state funding formulas, and recapture.
Austin’s turnaround effort comes to an end
While Midland’s dispute centers on control over school funding, Austin ISD is confronting other areas like accountability and district governance where the state has assumed increasingly broad authority.
Austin ISD announced this week that it would end its partnership with the Texas Council for International Studies, the nonprofit organization that had been expected to help manage Burnet, Dobie, and Webb middle schools as part of the district’s effort to avoid state intervention.
The arrangement was intended to qualify for protections available under SB 1882, a state law that allows districts to enter partnerships with charter organizations, nonprofits, universities, and other outside operators. Qualifying partnerships can receive additional funding and, in some circumstances, a pause in certain accountability consequences while the outside organization manages the campus.
That strategy unraveled in May when TEA determined that the partnership didn’t meet the statutory requirements necessary to receive those protections. Austin ISD initially asked the agency to reconsider the decision, but the district and TCIS have now mutually agreed to end the partnership before the new school year begins.
The timing is significant because the three middle schools remain at risk under the state accountability system. Burnet, Dobie, and Webb have each received several consecutive unacceptable ratings, and another failing grade could trigger one of the most consequential interventions available to the state.
Under Texas law, when a campus receives unacceptable accountability ratings for five consecutive years, the education commissioner must either order the campus closed or appoint a board of managers to govern the entire district. A board of managers would replace the authority of Austin ISD’s locally elected trustees, giving state appointees control over district policy, leadership, spending, and other major decisions.
For its part, Austin ISD has pointed to improvements in student performance, including gains in mathematics, as evidence that its turnaround work is producing results. The district has also said that academic support, student services, and improvement plans at the three schools will continue even though the TCIS partnership is ending.
Still, with new accountability ratings approaching, the district has fewer options available if one or more of the campuses fails to demonstrate enough improvement under the state’s grading system.
The situation carries added weight because we’ve already seen what a districtwide intervention can mean. In Houston ISD, TEA replaced the elected school board with a state-appointed board of managers in 2023, with the agency later extending the disastrous intervention through 2027. The state has also made unprecedented moves toward appointing boards of managers in several additional districts.
A broader conversation about local control
Although Midland and Austin are facing different circumstances, both stories reflect the expanding role of state government to make increasingly untransparent decisions that were once largely left to local school boards and communities with clearer accountability structures.
In Midland, trustees argue that the state controls the district’s tax rate, determines how much locally raised money it may keep, and leaves local voters with little meaningful authority over school funding. In Austin, the district is trying to improve three campuses while facing an accountability law that could transfer control of the entire system from elected trustees to state appointees.
The state has a constitutional responsibility to ensure that students receive a quality public education. But the state’s current approach increasingly relies on centralized control, whether through school finance formulas, recapture, campus ratings, or takeovers.
The Midland lawsuit and Austin takeover threat are developing stories, and neither outcome is certain. But both cases will be important to watch because their consequences will reach beyond the Permian Basin and Central Texas. A TEA takeover of Austin ISD would be seismic, similar to when HISD was taken over, and an end to recapture would rewrite the entire school funding calculus. All of this is occurring under the specter of the next election and legislative session, which will each provide an opportunity to change state leadership and push elected officials to take more equitable and transparent action on public education.
