GCRTA plans to make significant cuts to bus and rail services in 2026

Due to higher operating costs, especially in healthcare for its employees, the Greater Cleveland Regional Transit Authority (GCRTA) plans to make significant cuts to bus and rail services in 2026, cutting a lifeline to jobs, education and medical services.

The Fiscal Year 2026 Service Management Plan was presented to the board by the Service Management Department, Operations Division. While some immediate cost-cutting solutions were recommended by the board and agency staff, it was too early for any potential service cuts to be specified. Kay Sutula, director of GCRTA’s office management and budget, informed the board that healthcare and prescription costs had increased by 34 percent from October 2024 to October 2025. The average annual increase over the prior six years was 3.8 percent. Should this trend continue through November and December, Sutula projects GCRTA’s total healthcare costs to be $45.6 million by the end of the year. That’s $9 million more than was budgeted for 2025 and, in total, represents almost 14 percent of GCRTA’s operating budget.

In formulating the GCRTA budget for next year, the transit agency could not keep service at current levels. Sutula said a 26 percent increase in healthcare and prescription costs will likely be incorporated into next year’s budget. To reduce the hit from those costs, a transfer in 2026 of $44 million to the general fund will be needed from the Revenue Stabilization Fund. That follows a $35 million transfer to the general fund from the Revenue Stabilization Fund so far this year, amounting to more than 10 percent of the agency’s total revenues.

After those transfers, GCRTA has no more reserves to tap, aside from a one-month reserve in case of unexpected emergencies. The Revenue Stabilization Fund, established following the 2020 pandemic, will be depleted by the end of 2026. The projected 2026 transfer won’t be enough to cover all of GCRTA’s rising costs.

“As GCRTA assesses its financial position, we are evaluating items in both our operating and capital budgets,” said GCRTA’s Public Information Officer Robert Fleig. “At present, there is no change to the railcar replacement program financial schedule.” The $450 million Railcar Replacement Program is the authority’s largest-ever capital improvement. It’s also $57 million over budget. Next year, GCRTA is due to take possession of its first new railcars in more than four decades for its three-route rail system.

GCRTA’s difficult financial picture showed 2026 revenues estimated at $363.8 million. The two largest sources of revenue are the countywide sales & use tax, budgeted at $278.7 million, and passenger fares at $31.5 million. Total operating expenditures are budgeted at $342.5 million. That doesn’t include transfers to other funds which are budgeted at $30.7 million. They maintain balances for the Bond Retirement, Insurance, Supplemental Pension, Capital Improvement, and Reserve funds.

GCRTA’s health insurance broker is the Oswald Companies, headquartered in Cleveland. It offers GCRTA employees two plans through Anthem: a preferred provider organization (PPO) plan, which has a larger network and an health maintenance organization (HMO) plan that is smaller and Cleveland Clinic-based. There is a waiver provision for GCRTA employees to opt out and go on a spouse’s healthcare plan. Sutula said the transit agency is looking at ways to incentivize employees to opt out.

GCRTA said other efforts will be made to reduce operating expenses this year and next. That includes removing 56 vacant positions from the 2026 budget, for a total of 2,397 positions agency-wide. Budgeted overtime and non-personnel items have been reduced and a hiring freeze is in place.

Source: GCRTA