Midland Independent School District trustees have unanimously authorized a lawsuit challenging Texas’ system for financing public schools, opening a new constitutional fight over local property taxes, state control and the redistribution mechanism commonly called “Robin Hood.”

The West Texas board voted Tuesday to proceed against the state and Texas Education Commissioner Mike Morath. The proposed case would be brought in Travis County, where Midland ISD intends to ask a state district court to declare key portions of the school-finance system unconstitutional.

The district’s central argument is that Texas officials now exercise such extensive control over school property taxes that the levy has effectively become a prohibited statewide property tax. The proposed complaint says the state calculates the district’s maximum compressed tax rate, requires trustees to adopt that rate to receive full funding and determines how much of the resulting revenue Midland may retain.

For the 2025-26 school year, Midland ISD says the state-directed rate produced approximately $313 million in Tier One maintenance-and-operations property taxes. The district expects to transfer about $83 million, or roughly 27% of that amount, through recapture by Aug. 15.

Recapture requires districts whose local revenue exceeds their entitlement under state formulas to surrender or otherwise redistribute the excess. The Texas Education Agency describes those funds as a source of financing for public education across all districts, helping communities with lower taxable property values provide programs that are comparable to those in wealthier areas.

Midland officials do not dispute the state’s obligation to provide equitable educational opportunities. Instead, they contend that the current structure has moved beyond equalization by depriving locally elected boards of meaningful control over tax rates and spending.

Board President Joshua Guinn has argued that Midland trustees are placed in the position of collecting taxes at a rate determined by Austin, transferring a substantial share to the state and then facing local criticism over the tax burden. The district says it has paid more than $1 billion through recapture since 2013.

The dispute also illustrates the difference between taxable property wealth and the financial circumstances of students. Midland sits in the oil-rich Permian Basin and has a large property-tax base, placing it among Texas’ largest recapture contributors. At the same time, local officials say nearly 60% of the district’s students are economically disadvantaged.

Trustee Matt Friez summarized the district’s position during the meeting by saying that “property wealth is not educational wealth.” Midland argues that the formula recognizes the value of mineral properties beneath the community but does not adequately account for the cost of recruiting and retaining teachers or serving students with significant needs.

The proposed litigation focuses heavily on House Bill 3, the major school-finance law adopted by the Texas Legislature in 2019. That law increased state involvement in calculating districts’ maximum compressed tax rates as part of a broader effort to reduce local property-tax burdens and revise the Foundation School Program.

Midland’s draft complaint argues that the changes left its trustees performing largely administrative functions: adopting a state-calculated rate, collecting the taxes and following detailed state rules governing the revenue. It claims that this arrangement violates Article VIII of the Texas Constitution, which bars the state from levying an ad valorem tax on property.

A second claim argues that the Tier One maintenance-and-operations levy was never directly approved by Midland voters as required by another provision of the state Constitution. Those arguments have not been tested in court, and Texas officials are expected to defend the system as a lawful framework that preserves local taxing authority while meeting the state’s responsibility to finance an efficient public-school system.

Recapture grew out of decades of litigation over stark differences between property-rich and property-poor districts. After families and districts led by San Antonio’s Edgewood Independent School District challenged unequal school resources, Texas lawmakers created a system in the early 1990s to limit funding disparities.

The mechanism initially applied to a relatively small group of affluent suburban and oil-producing districts. Its reach has expanded as property values have risen and state formulas have changed. State projections cited in Midland’s proposed complaint estimate that recapture could collect about $2.5 billion from 213 districts in fiscal 2027.

Those contributors now include large urban systems and districts with substantial student poverty, not only traditionally affluent communities. That shift has intensified criticism from school boards that say the “property-wealthy” designation does not describe the families attending their schools or the pressures on their operating budgets.

The state system has repeatedly survived litigation. In 2016, the Texas Supreme Court ruled that the school-finance structure met minimum constitutional requirements despite serious imperfections. The court also emphasized that education policy choices largely belong to lawmakers, while leaving open the possibility that future changes could produce a different constitutional dispute.

Midland’s lawsuit is designed to distinguish the current system from the one considered in 2016. Its lawyers argue that the state’s control over tax rates and revenue became substantially greater after House Bill 3, creating a new factual and legal foundation for the challenge.

The district will be represented by attorneys Kevin O’Hanlon and Kara Belew, both of whom have extensive experience with Texas education policy. O’Hanlon previously represented the state in the landmark Edgewood litigation, while Belew has held senior state budget and education-finance positions.

The Texas Education Agency declined to comment to The Texas Tribune on the board’s decision. The agency’s public guidance says recaptured revenue is used to help finance the Foundation School Program, the principal mechanism through which Texas distributes state and local money to public schools.

It remained uncertain Thursday whether other districts would join Midland. Broader participation could increase the case’s financial and political significance, but the proposed complaint maintains that a single district can establish a constitutional violation when the state allegedly forces it to tax at a particular rate.

Any ruling would likely be appealed, potentially returning Texas school finance to the state Supreme Court. A victory for Midland would not automatically establish a replacement funding formula. It could instead invalidate parts of the current structure and require the Legislature to redesign the relationship among state aid, local tax rates, recapture and spending mandates.

Until then, the district must continue operating under existing law. The board has already approved its budget but was awaiting final state tax-rate calculations, highlighting the practical complaint at the center of the case: Midland says it knows what its schools need, yet lacks the authority to independently determine how much local revenue to raise and retain.