What happened: Midland ISD’s board unanimously voted Tuesday, July 21, to sue the State of Texas over the school finance system, authorizing a constitutional challenge to the “Robin Hood” recapture program. This year, the district expects to send roughly $44 million to the state under recapture.

The board also reviewed projected A-F accountability ratings, the annual property-value report that will help determine this fall’s tax rate, a bond refinancing expected to save nearly $59 million in interest, and a change to district policy that ties grade advancement to summer school participation for students not on grade level.

Why it matters: Midland ISD is one of the largest recapture payers in Texas and estimates it will have returned more than $1 billion to the state since 2013-14. Even if the district wins, a court could not simply eliminate recapture. Instead, it could require the Legislature to rewrite the funding formula, similar to what happened after a 2005 Texas Supreme Court ruling.

The lawsuit argues lawmakers fundamentally changed the system in 2019 by taking local control over maintenance-and-operations (M&O) tax rates. The suit contends that it effectively became a statewide property tax prohibited by the Texas Constitution. During the meeting, the district’s chief financial officer noted the board cannot legally set its M&O tax rate until the state issues each district’s maximum compressed rate every August.

Midland’s top stories. One quick email. Free, every Friday.
Get Midland Wrapped, our free weekly email for busy Midland residents. Each Friday, we break down the week’s most important local stories — what happened, why it matters, and what to watch next — so you can stay informed without the noise.

“That is essentially a property tax, a statewide property tax,” Board President Josh Guinn said.

Key points:

  • The recapture lawsuit: An attorney representing the district said their legal challenge rests on Article VIII, Section 1-e of the Texas Constitution and the Texas Supreme Court’s 1992 ruling that struck down county education districts.

Trustees also discussed the lawsuit’s cost. Guinn said attorneys estimated it could cost roughly $1 million, depending on how long the case lasts. Trustee Tommy Bishop said the expense should not come from money already budgeted to operate the district. Guinn pointed to the possible sale of unused district properties as one way to cover the cost.

“We’re going to manage it carefully,” Trustee Brandon Hodges said.

Trustee Matt Friez said he asked the district’s CFO last year what would happen if the district lowered its proposed tax rate by 10%. He said he was told district revenue would decrease while recapture increased. Raising the tax rate by 10%, he said, would also increase recapture.

“We have no meaningful sense that this board controls the tax,” Friez said. “We proved it with our own numbers just last year.”

  • Property value appraisals: During the Midland Central Appraisal District’s (MCAD) annual presentation, Friez questioned whether appraisals are as accurate without access to local home sales data. MCAD’s chief appraiser said the district lost access to MLS sales information about five years ago when local real estate agents stopped sharing the data.

She noted several neighboring appraisal districts still have MLS access. Because Texas is a non-disclosure state, she said MCAD also cannot obtain sales data from the state comptroller.

“It negatively impacts property owners,” she said.

  • Grade advancement tied to 70 average: Administration said the district’s revised promotion policy requires students to maintain at least a 70 average in core classes. Campuses may also recommend summer school based on any assessment showing a student is performing below grade level.

Superintendent Stephanie Howard said attendance and successful completion of summer school may factor into retention and promotion decisions.

  • Accountability projections: Howard previewed projected A-F accountability ratings ahead of the Texas Education Agency’s official release on Aug. 14. She projected 15 campuses will earn an A or B rating, up from 14 last year, while projecting six campuses will receive a D or F, down from nine. She said that the district projects every secondary campus will earn a C or higher.
  • District organizational chart: Administration walked trustees through the district’s new online organizational chart after Friez requested one during a June board meeting. The chart lists 53 central office positions, while campus employees are searchable through each school’s “Campus Administration” and “Faculty & Staff” pages. Friez pushed the district to publish additional information.

“I think the more transparency we can provide as far as class sizes, number of teachers that are subject matter experts, number of teachers that are certified,” Friez said. “The more we can investigate what variables are working, what’s not working, and make adjustments.”

Bishop suggested identifying high-performing Teacher Incentive Allotment (TIA) teachers on campus pages so parents could easily see whether a teacher earned a TIA designation or is certified. Administration said it would explore the request.

  • Middle school fine arts grant: Howard discussed a potential grant from a local foundation that could fund approximately $26 million in middle school fine arts renovations and additions. The district’s CFO estimated the expanded facilities would add about $24,000 in annual operating costs and another $50,000 in insurance.

The district’s fine arts director said more than 6,500 students, about 22% of MISD enrollment, participate in fine arts. Friez said principals consistently identify student apathy as one of their biggest challenges and argued fine arts could help address it.

  • Interest savings refunding bond: The district’s CFO presented a bond refinancing that he said would save approximately $58.8 million in interest by paying off debt sooner. He also explained that changes in state law reduced state funds for districts whose tax collections exceed their required annual debt service.

He said MISD currently receives about $1 million in state funding to offset property tax revenue lost after Texas increased the homestead exemption from $100,000 to $140,000.