The bi-county transit agency's board of directors met in San Rafael Wednesday to discuss its strategic plan update, including the funding shortfall.
The deficit is partly due to a 4.2 percent reduction in sales tax revenue in 2008, Coursey said. A quarter-cent sales tax approved by voters in Marin and Sonoma counties in November helps finance the project.
"We projected the sales tax revenue would be flat," Coursey said.
"It will be down again this year."
Estimated construction costs also have increased and the bond market has contracted, crimping SMART's ability to finance the project by selling bonds, Coursey said.
"The lending atmosphere is 180 degrees different than a year ago. Our consultant is saying the amount we can borrow is $100 million less," Coursey said.
SMART has the money for design and engineering plans, and funds for construction aren't needed for another two years, Coursey said.
"We'll need a big influx of money then. We plan to issue bonds then to borrow against future tax revenue," Coursey said. SMART also is seeking state and federal funding for the project.
SMART still hasn't decided whether to purchase European-style rail cars or heavier American-made cars that comply with Federal Railroad Administration emissions regulations, Coursey said. The cost of those cars has increased as well, Coursey said.
The board of directors plans to solicit bids for both models and will discuss that issue next month, Coursey said.
SMART still plans to operate the passenger train with Cloverdale as the northernmost station, Coursey said.
Cloverdale Councilwoman Carol Russell attended the meeting Wednesday and strongly objected to any suggestion that the project be downsized to eliminate the station in her city, Coursey said.
"There was never a plan to eliminate Cloverdale, but we should have a Plan B in case," Coursey said.
The cost to build the project is now estimated at $590 million -- about $49 million more than November's estimate, Coursey said.