Oahu’s rail transit system is on track to cost at least half a billion dollars more than originally budgeted, according to a financial assessment released Thursday by rail officials, who blamed lagging tax revenues, fast-rising construction costs and project delays.

The report, presented at the Honolulu Authority for Rapid Transportation board meeting in Kapolei, warns that the $5.26 billion rail project could wind up costing taxpayers 10 to 15 percent more than budgeted. A 15 percent increase would raise the project’s total cost to more than $6 billion.

To deal with the mounting costs, rail officials are floating several possibilities, including one the city has been reluctant to take so far: Diverting more than $200 million in federal dollars normally used for the city’s bus system. 

Those so-called “5307” federal Urbanized Area Formula Program funds were included in the financial plan to build rail essentially as an added layer of insurance, even though various elected leaders and bus advocates questioned the move. Federal transit officials also cautioned against using those dollars for rail, citing Honolulu’s relatively old bus fleet.

Now, in its “project risks update” report, HART officials say the city will have to come up with $210 million from somewhere else if it wants to keep avoiding the federal bus dollars included in the rail financial plan.

The new HART report further suggests that to help pay the growing costs to complete the project, city and rail officials should consider extending the 0.5 percent general excise tax surcharge for Oahu, which is scheduled to expire in 2022 — or even lift the tax’s sunset altogether.

It’s a move that city and rail leaders already have been discussing for about a year.

The update to board members comes in the wake of several key financial challenges to affect the project in recent months:

>> This past summer, the bids to build the transit system’s first nine stations exceeded the project’s budget for that work by more than $100 million. Those bids were canceled and the work will be rebid in smaller packages that HART officials hope will attract less pricey bids — even if they’re still more expensive than what HART budgeted.

>> Rail officials have now put the total cost to the project for construction delays stemming from both legal challenges and city officials awarding contracts before they were authorized and ready to build at as much as $190 million.

>> Rail has received $41 million less in GET surcharge dollars — the main revenue source to build the 20-mile, 21-station project — than it had expected to have at this point.

Earlier this month, HART canceled its bid solicitation for the project’s next major scope of work: to build the remaining 10-mile stretch of elevated guideway, from Aloha Stadium to Ala Moana Center. 

Rail officials say they plan to re-package that work next year for new bids. They’re now considering splitting the work instead into two 5-mile stretches, and including the stations that will be built within those areas. They hope the move will curb at least some of the higher costs they’re seeing in their bids. 

HART had originally budgeted $750 million to build that 10-mile guideway stretch.