The Texas Education Agency has opened an investigation following a report that Houston Independent School District’s appointed Superintendent Mike Miles’ charter school network, Third Future Schools, was using Texas tax dollars to subsidize financially struggling schools in Colorado. 

When the story broke, State Rep. Ana Hernandez issued a letter to TEA Commissioner Mike Morath to “urge an investigation into the alarming allegations regarding Houston Independent School District Superintendent Mike Miles’s use of state funds to pay for out-of-state school debts.” 

The allegation is that in 2023, Miles’ network received $25 million in public funds for his Texas charter schools based in Midland, Ector, and Austin ISDs, but only $15 million was spent on those schools. The report says that 40 percent of the budget was used for unspecified reasons and to offset debt incurred by other schools in the network based in Colorado.

Miles, who initially ignored the report, issued his statement: 

I had initially planned not to respond to an article circulating that badly misunderstands, or worse, intentionally misrepresents the financial practices of Third Future Schools.


The budgets of all Third Future Schools in Texas are attached to the management agreement with the local school district and are a part of the approval process. Administrative fees are applied to all schools in all states in order for the central office to oversee and monitor the schools, as well as provide network-wide support (such as finance and human resources) from people and departments in the central office, which is located in Colorado.

Morath issued a press release stating that he was referring the complaints to the complaint department, noting that “school districts have autonomy to engage with vendors to provide education services. As a vendor of the school district, Third Future Schools would have latitude afforded under its contract with each district to spend its funds in service of the contract.” 

The statement went on to say that while the story doesn’t provide evidence of misappropriation of funds in any of the district’s Third Future Schools works, they would still be reviewing the complaint.

Charles Blain

Charles Blain is the president of Urban Reform and Urban Reform Institute. A native of New Jersey, he is based in Houston and writes on municipal finance and other urban issues.