DENVER – Gov. Bill Ritter signed the 2009-10 state budget into law on Friday after months of wrangling in the legislature about how to trim the state’s spending to match a recession-induced decline in revenues.

Ritter exercised his line-item veto authority on only five items, most notably a provision that allowed the state’s public colleges and universities to increase tuition by more than 9 percent.

He had nothing but praise for the budget-drafters of the Joint Budget Committee, who surrounded him at the signing ceremony in the governor’s office.

“Putting the budget together was a challenge,” Ritter said, “and in challenging times, our values are tested the most.”

He said the budget protects education, health care, economic development and “vital safety-net services” to serve the growing number of Coloradans who need help getting through the economic downturn.

Sen. Moe Keller, D-Wheat Ridge, chairwoman of the Joint Budget Committee, said the state had balanced its budget “with minimum damage to our most vulnerable populations.” She and others pointed out that demand for state services goes up when the economy – and therefore state income – goes down.

The budget for the next fiscal year, which begins July 1, includes $7.6 billion in general fund expenditures, trimmed $600 million from what Ritter himself requested in November, when the full force of the economic downturn was just becoming apparent.

It also appropriates $5.5 billion from cash funds, which are dedicated to specific budget items like roads and K-12 education. Even so, $212 million in cash-fund money was transferred to the general fund.

The budget also includes $4.6 billion in grants from the federal government and $1.5 billion in reappropriated funds. Taking away the reappropriated funds figure so the money isn’t counted twice, the state’s total 2009-10 budget is $17.7 billion.

Major cuts were taken from the Department of Corrections, but other departments survived relatively unscathed. Most of the money scrounged to balance the budget came from transferring funds from one pot to another, or from finding new sources of revenue.

For example, an additional $134 million came from cutting the state’s reserve fund in half, and senior citizens lost a tax exemption on the first $200,000 of the assessed value of their homes. Suspending the exemption will yield an estimated $90 million in additional revenue.

Unless the economy recovers quickly, future budget battles are a foregone conclusion. The Senate spent more than an hour on Friday debating an innocent-sounding resolution calling for creation of a commission, without any authority, “to study long-term fiscal stability.”

Rep. Jack Pommer, D-Boulder, who will become JBC chairman as it drafts the 2010-11 budget, said chances were “pretty good” that the next budget-drafting process will be more stressful than this one was.

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