A West Texas school district’s lawsuit could bring the state’s public school finance system to courts for the first time in a decade. The suit asks a Travis County judge to rule on the controversial “Robin Hood” funding mechanism that funnels about half of Austin school tax revenues to the state.
Midland Independent School District trustees voted unanimously on Tuesday to file a lawsuit challenging the state’s recapture system, arguing that the formula robs local school boards of the ability to set local property taxes. The finance system collects funds from school districts with high property values — like Austin ISD — and redistributes the money to other Texas school districts that can’t collect enough locally to cover the cost of educating students.
Attorney Kevin O’Hanlon, who is representing Midland ISD in its lawsuit, said there was interest from other districts in joining the lawsuit but no others had officially signed on yet. Austin ISD did not immediately respond to a request for comment.
Trustee Fernando de Urioste said he’d need more information about any lawsuit and community interest in the matter before making a decision about joining in. De Urioste described recapture as one component of the funding system that shapes how much districts receive; another important factor is the basic allotment, which determines how much districts get for every student.
If a lawsuit challenging recapture were brought before Austin ISD’s school board, trustee Candace Hunter would be interested in joining, she said.
“It is important for districts that have more to supplement the districts that don’t have enough,” Hunter said, “but not at the cost of the district.”
In the suit, lawyers representing Midland ISD allege that a 2019 school finance reform law shifted the power to set property tax rates away from local school boards to the Texas Education Agency. The lawsuit alleges this violates a Texas constitutional ban on a statewide property tax. Midland ISD sends about $83 million of the $313 million it collects from local property taxes back to the state.
A 1991 Texas Supreme Court ruling found Texas’ school funding system had “glaring discrepancies” because of an imbalance in property wealth among districts. The recapture system has been the subject of frequent legal challenges since it began.
In 1994, recapture collected about $131 million from 34 of Texas’ roughly 1,000 school districts. The system now collects about $2.9 billion from more than 200 school districts, according to the Texas School Coalition, a group that advocates on school finances issues that formed following the creation of recapture.