I don't wish to drift the thread too much and keep discussion of racist songs in its own thread, but to me saying this song is racist is kind of grasping at straws.
The basis of the argument seems to be:
- I'm Workin On the Railroad, the basis of the song's tune, has racist origins (namely an 1894 Princeton songbook)
- the phrase "the eyes of Texas are upon you" derives from a Robert E Lee quote
- it was sung in the past in blackface as a part of a fundraiser.
As for the racist origins of Workin on the Railroad, I've found a reference (though not the text, unfortunately) to The Levee Song from Pennsylvania in 1893 predating Princeton's publication, giving more credence to the belief among many folkrorists that the song predates Princeton's version and could have originated as an African American hymn/work song.
As for the second point, simply being based off a quote from Robert E Lee to me does not make it racist. The school's founder liked the quite from