With the special session on rail looming in two weeks, legislators still don’t have a deal. But leaders from both chambers appeared open to raising the state’s hotel room tax to help rescue the beleaguered transit project during a marathon hearing Monday.

“I don’t know why reasonable, intelligent people can’t figure this out,” House Finance Committee Chairwoman Sylvia Luke told city officials during the seven- hour briefing at the Capitol during which rail leaders, including Honolulu Mayor Kirk Caldwell, faced a panel of mostly frustrated state lawmakers and once more took their lumps for how the city has handled the project.

When it comes to paying for rail, “what you need is more front-loading right away,” Luke told them, pushing for a plan that would almost immediately boost rail’s coffers with transient accommodations tax dollars. The move would help pay off the project’s debt financing more aggressively and help save on costs, she said.

Caldwell and other city officials continued this week to endorse a 10-year extension of Oahu’s general excise tax surcharge, which is what the state Senate passed in May. But the two chambers couldn’t agree on a rail bailout, and the effort died.

They’ll aim to try again during the Aug. 28-to-Sept. 1 special session. Meanwhile the city faces a Sept. 15 deadline to show the Federal Transit Administration how it aims to solve rail’s multibillion-dollar funding mess, or it could lose some or all of its federal funding.

On Monday, Luke’s new counterpart in the Senate, Ways and Means Chairman Donavan Dela Cruz, called it “selfish” for the city to tie up some $2 billion in additional GET dollars for a single project when the state needs to deal with its pension issues, plus other capital projects.

When Caldwell Chief of Staff Gary Kurokawa told Dela Cruz (D, Wahiawa-Whitmore-Mililani Mauka) that the city understands, Dela Cruz said, “I don’t think you do, because if you did you wouldn’t be here asking for $2 billion in GET.”

Despite those comments Monday, Dela Cruz was among the senators who voted back in May for the 10-year GET extension. That vote was also largely a rebuke of Dela Cruz’s predecessor leading Ways and Means, Sen. Jill Tokuda (D, Kailua-Kaneohe).

During a break in Monday’s hearing, Dela Cruz texted in response to a Honolulu Star-Advertiser query that he’s “looking at all options.” He and other lawmakers are “meeting and talking and working hard to reach common ground,” he added.

Rep. Henry Aquino, chairman of the House Transportation Committee, said the hotel tax option “is being closely looked at at this time,” but he added that the two chambers still aren’t close to a deal. Luke said they’ve been meeting “sporadically” in recent weeks, sharing rail-related facts and details as they collect them.

“I think we’re working in that direction” toward a workable deal, said Aquino (D, Waipahu).

Caldwell, meanwhile, aimed to start Monday’s hearing with a detailed presentation from several of his Cabinet members on why the city couldn’t afford to lose some of its hotel tax share to help pay for rail, as suggested by House leaders earlier this year. Their message was that the move would burden city taxpayers with more general-fund expenses. Lawmakers on the panel cut that presentation short, however.

Caldwell also testified at the meeting’s start that the FTA “will allow nothing less” than building the full 20-mile line to Ala Moana Center. During a later exchange with Sen. Gil Riviere (D, Heeia- Laie-Waialua), a prominent rail critic, Caldwell acknowledged that it’s still not clear whether the federal agency would accept a scaled-back version of the project as part of rail’s recovery process.

Members of Hawaii’s tourism industry, including Ed Case of Outrigger Enterprises Group, implored lawmakers not to enact a TAT increase to fund rail.

“Visitors can and will go elsewhere,” Case told them. “We believe … we are being unfairly targeted to pay for rail.”

Local hoteliers testified the increased taxes will hurt their ability to compete with other destinations. Dela Cruz and Sen. Donna Mercado Kim (D, Kalihi Valley-Moanalua-Halawa) in turn criticized the special resort fees that many of them charge and questioned whether they were necessary.

Mufi Hannemann, a former Honolulu mayor who helped spearhead rail, testified Monday as president and CEO of the Hawaii Lodging &Tourism Association. He called for more private-sector financing and participation on rail’s final four miles into town, which most agree will be the most challenging stretch to build.

Neighbor island political leaders, including Maui Council Councilwoman Stacy Crivello, asked state lawmakers to shield their counties from added TAT or even GET surcharges to help pay for Oahu’s rail project — an option that House leaders said was still on the table.

Mike White, Crivello’s fellow Maui County Council member and a manager at the Kaanapali Beach Hotel, told the panel that a 1 percent TAT increase would “direct nearly $30 million to the state coffers instead of remaining in the neighbor island communities and economies.”

The Hawaii State Association of Counties recently endorsed extending Oahu’s GET surcharge to finish rail.

Kim, Riviere and Sen. Laura Thielen (D, Hawaii Kai-Waimanalo-Kailua) also expressed skepticism that rail costs wouldn’t continue to climb past whatever the Legislature passes, given the project’s recent history.

Kim called city leaders “arrogant” for assuming the state would bail them out in time for their Sept. 15 deadline.

Rep. Matt LoPresti (D, Ewa Villages-Ocean Pointe-Ewa Beach), meanwhile, said taxpayers would pay for rail either one way or another.

“It’s whether they pay through you or us or both of us,” he said, referring to the county and the state. “It upsets me a little bit that property taxes are sacrosanct, but if we tax the poor that’s OK,” he added, referring to the GET surcharge.