OLYMPIA, Wash. (AP) - Gov. Chris Gregoire approved the state's $35 billion two-year operating budget on Tuesday, calling the slash-and-burn spending plan a "necessary evil" that manages to protect education programs while the state waits out a deep recession.

Gregoire mostly agreed with the spending plan put together by her fellow Democrats in the state Legislature. It solves a projected $9 billion deficit through mid-2011.

About half of the deficit solution came from federal bailouts and other one-time fixes, and about half came from cuts to projected spending. Changes to tax law and other revenue drivers, such as expanded liquor sales, make up the balance. The new budget assumes no general tax increases.

Gregoire's budget signature was the final word on a long and difficult 2009 legislative session for the state's Democratic ruling class, which had gleefully increased spending on education, health care and other priorities in recent years as the housing bubble fueled a steady climb in tax revenues.

"They say misery loves company," Gregoire said Tuesday, surrounded by key Democratic legislators. "And all of us were miserable together when we made the very difficult choices for the people of the state of Washington."

The state counts on a sizable chunk of federal bailout money to help keep state-financed programs alive.

About 3,000 jobs will be lost through spending cuts in the new budget, including teachers. Some 40,000 people will be cut from state-subsidized health care. Hospitals and nursing homes will be paid less to care for the poor, and university students could see their tuition jump by nearly a third over two years.

"Reductions were made across all parts of government," Gregoire said. "Everybody had to be part of the solution, and everything had to see its fair share of cuts."

Although no tax hikes are included, consumers will notice a range of more expensive fees and surcharges as a result of the 2009 Legislature's search for revenue. Washingtonians will pay more when getting a hunting license, filing paperwork on a home purchase, getting a professional license and more, stemming from the budget itself or separate bills passed by lawmakers.

Some increased fees are technically optional, including a $5 opt-out fee on car tabs to pay for parks and a negotiable $100 increase in the fees car dealers can charge on paperwork, meant solely as a bailout for that industry.

Minority Republicans have warned that the Legislature's budget relies far too heavily on one-time patches, including about $3 billion in federal money and more than $1.4 billion in transfers from off-budget accounts.

Gregoire said she shares that concern, but sees the patchwork approach as crucial to avoiding further cuts she said could damage education or social services.

Gregoire vetoed several provisions of the budget on Tuesday, most notably the Legislature's $29 million raid of surpluses in the state auditor's voter-approved performance audit program.

State Auditor Brian Sonntag, who loudly lobbied for a slimmer reduction to the program that searches for government efficiencies, agreed to set aside $15 million instead, Gregoire said.

Gregoire also vetoed a $22 million transfer from the state Convention Center, saying she questioned the legal footing of the approach and disagreed with a resulting reduction in tourism spending ahead of the 2010 Winter Olympics in British Columbia.

Top Democratic budget writers agreed with Gregoire that efforts to spare education programs from the deepest budget cuts would serve the state well as it tries to rebound from the lingering recession.

"Of all the areas in state government, that's where we tried to minimize our cuts," said Sen. Rodney Tom, D-Medina, the Senate's No. 2 budget leader.

House Ways and Means Chairwoman Kelli Linville, D-Bellingham, also pointed out the Legislature's commitment to paying for health care for children, including those up to three times the federal poverty level.

"If you're not sending healthy kids to school, they're not going to learn very well," Linville said.

Republican leaders didn't attend the bill signing ceremony, but Gregoire said she's gotten mostly good reviews from the GOP for the budget's approach.

"They absolutely were persuaded that we were going to come in here and raise taxes, and it didn't happen. It didn't happen," Gregoire said.