1) Cost increases over the past year have all been to account for estimated inflation between now and 2028. This is deliberate--the committee wants to have a realistic budget to target revenue goals against, not a fairy-tail budget, even if it looks bad early on.
2) LA is not building many new facilities for the Olympics. Almost all of the facilities will be existing facilities, like Staples, the United Airlines LA Coliseum, the Rams/Chargers(?) stadium, the pools at Loyola Marymount, UCLA and USC, the tracks and fields at all three colleges, the port of Long Beach, Santa Monica Beach, etc. Athletes will be housed at UCLA and USC (again), and the media center will be paid for and built by NBC largely at existing facilities.
The facilities that will need to be built: a velodrome for indoor cycling. A rock wall for the climbing events, location undetermined, but which is expected to remain after the event. BMX courses in Big Bear, which the resorts there have said they will maintain after the event depending on location.
3) Tax dollars are not being wasted on this event. The purpose of the budget is to raise private funding, i.e., donations or sponsorships. LA 2028 is working with NBC (first time in history organizers have worked with broadcasters) to sell a joint package so that they aren't competing against the broadcaster.
The lack of tax dollars also means that it's not a choice between the Olympics and housing, etc. In fact, the Olympics are spurring the use of tax dollars on housing and transportation infrastructure, including the acceleration of nearly 40 years of public transit building into 12 years. The public transit lines planned have already led to thousands of new housing units being built in LA county in proximity to those lines.
4) The LA Olympics have been profitable. Every. Single. Time. The 84 Olympics are still the most profitable in history by whatever metric you use, especially once adjusted for inflation. The returns from the 84 Olympics are still being used to fund K12 athletics today. As in 84 and 32, LA wasn't the first choice for the Olympics and its plan every time has been the overwhelming re-use of existing facilities. (Even the LA Coliseum was built more than a decade before the Olympics as a war memorial.)
5) LA is capable of holding an Olympics next year, if necessary. The only other city with sufficient facilities to hold an event of this magnitude on such short notice is London, which has maintained most of its facilities from the 2012 Games.