THINGS ARE TOUGH all over. But they're looking especially dismal at the Portland Bureau of Transportation (PBOT), which is all of a sudden looking to cut $15 million to $16 million permanently from its ongoing budget.

In a time of billion-dollar bailouts, that might not sound too bad, but the cuts will axe 14 percent of the funding responsible for things like maintaining streets, building bikeways, and installing traffic signals all over Portland.

"The cuts we face today are of a magnitude we haven't seen in forever, in my knowledge," says PBOT Director Tom Miller, who will be drawing up a concrete list of cuts before April. Draft ideas for cuts sliced as many as 100 PBOT jobs.

The bureau has publicly pinned the blame for the cuts on declining gas tax revenue. And it's true the city has been a victim of its own success in encouraging citizens to bike, walk, and use transit more often. Fewer cars on the road is good for the environment, but bad for city coffers: Because Oregonians are driving less these days, PBOT's gas tax revenues will fall short of projections by an average of $4.85 million annually for the next five years.

But PBOT's budget shortfall is about $16 million. The other $11 million stems largely from big, expensive transportation projects Mayor Sam Adams has committed to—but don't generate any revenue.

Last year, Adams decided to set aside $8 million a year from new state gas tax revenue—for 20 years, starting in 2013—to help fund the Sellwood Bridge rehab. Over the next two years, Adams has chosen to put $16 million in gas tax revenue into building new sidewalks. PBOT was also recently signed up to spend $3.5 million a year (starting in 2013) on the Portland-Milwaukie light rail line, while committing about $1.3 million every year for operating the Eastside Streetcar.

These projects are examples of Adams' bold approach to building out Portland's multi-modal transportation system. But they raise the specter that his transportation legacy will be known more for harsh cuts than model projects.

"The bottom line is, until we receive directives otherwise, we will be continuing those obligations. If that means we have to cut elsewhere, in the bureau, we will," says Miller.

"They're all good projects," says Planning Commissioner Chris Smith, who also runs the blog Portland Transport. "We got caught up in the expectation of revenue that didn't materialize."

While the big projects have received widespread political support, actually finding money for them is far less palatable. As Smith points out, the idea to cover Sellwood Bridge costs with a toll was killed in planning. The Eastside Streetcar is even trickier. The $1.3 million average annual operating cost of the new streetcar loop stretching from the Broadway Bridge to the Oregon Museum of Science and Industry was supposed to be covered by new parking meters installed around the Central Eastside. But that was a "pre-recession" idea, says Miller: Business owners were set against installing meters, so for now, the meter plan is dead. To make up for the lost revenue, PBOT will be digging deeper into its own pockets.

Mayor Adams says the meter plan will be revised, but that it's not off the table. He also contests the description of the streetcar, light rail, and Sellwood Bridge projects as non-revenue earners, since they bring in hundreds of millions in federal investment.

"The amount we're spending pales in comparison to the amount of outside funding we're getting for these projects. It's a fantastic deal for the city, though it comes at a tough time because of the recession," says Adams. "It would be foolish to walk away from money that we have in our hand that other cities would die to have."