On Tuesday night, the Midland Independent School District board put a 74-page draft petition on its agenda and prepared to vote on whether to authorize a constitutional lawsuit that challenges the state's compressed school property-tax rate and recapture system. If trustees sign off, the filing would ask a Travis County judge to declare parts of the Foundation School Program and related education-code provisions unconstitutional, arguing the current setup effectively turns a local tax into a prohibited state property tax.
Petition Names State, TEA Chief as Defendants
As reported by Dallas Express, the draft petition attached to the public agenda names Texas Education Commissioner Mike Morath and the State of Texas as defendants and contends that House Bill 3's 2019 changes stripped local trustees of meaningful control over the Tier One maintenance-and-operations tax. The proposed filing leaves the judicial district line blank and uses placeholders for taxpayer plaintiffs, signaling that Midland had not yet formally filed the case at the time of the meeting.
What Midland Is Arguing
Trustees argue that the post-2019 framework requires districts to adopt a Texas Education Agency-calculated maximum compressed rate, leaving no meaningful local choice and triggering recapture payments that siphon off locally raised revenue. That claim forms the core of the draft petition, as outlined in coverage by Permian Press.
How Big the Bite Is
The petition cites a TEA maximum compressed rate of $0.5814 per $100 of taxable value and says that rate produced roughly $313 million in Tier One collections, with about $83 million projected to be recaptured this year, according to Dallas Express. Midland ISD reports that roughly 25.10% of the maintenance-and-operations tax rate is subject to recapture and notes the district first became a recapture district in 2013-14; district materials and the draft petition together put cumulative recapture at roughly $1 billion or more since then.
Legal Hurdles and Precedent
Midland's challenge faces steep legal terrain. In a 2016 opinion, the Texas Supreme Court upheld the school-finance system's minimum constitutionality while still recognizing the need for meaningful local discretion, as FindLaw notes. Any victory for Midland would almost certainly draw appeals and could send lawmakers back to Austin to rework funding formulas rather than deliver an immediate end to recapture.
What Happens Next
Trustees were scheduled to take up the litigation item at their July 21 meeting. If the board votes to authorize the case, the district could file in Travis County and ask a judge to strike down the cited Education Code provisions. Quorum Report has flagged the agenda item and noted that subscribers can download the draft petition attached to the meeting packet.
Midland officials say the timing is urgent as statewide recapture totals continue to climb. KVUE reported that statewide recapture rose from about $1.66 billion in 2016 to roughly $2.57 billion in 2026, an increase the petition cites as evidence that the system's reach has expanded. Local coverage and district documents suggest the outcome could reshape how property-wealthy Texas districts fund schools, a possibility that Permian Press has emphasized in its reporting on the agenda.
