(Reuters) - Governor John Kasich signed on Thursday a bill that curbs collective bargaining rights and bans strikes affecting about 360,000 public workers, making Ohio the most populous state to pass anti-union legislation this year.

Republican Kasich signed the controversial measure at a ceremony in Columbus one day after it received final approval from the legislature.

"(The bill) gives local governments and schools powerful tools to reduce their costs so they can refocus resources on key priorities like public safety and classroom instruction," Kasich said in a statement.

While massive protests in Wisconsin earlier this year grabbed national attention, Ohio is far more important to the union movement. It has the nation's sixth largest number of public sector union members, which is twice as many as Wisconsin.

Wisconsin passed a law similar to Ohio earlier this year but a judge temporarily blocked its implementation and Wisconsin Republicans on Thursday said they would suspend enforcing the law while they fight the legal challenge.

Several other states are considering anti-union legislation and the issue is likely to be a factor in the 2012 elections. Lawmakers in New Hampshire and Oklahoma on Thursday approved proposals that critics said would hurt public sector unions.

The wave of anti-union measures in the states may be the biggest challenge to the power of the union movement in the United States since then President Ronald Reagan fired striking air traffic controllers nearly 30 years ago.

Ohio Democrats want to overturn the new law through a referendum on the November ballot. Under Ohio law, the measure does not take effect for 90 days. If opponents are able to secure the approximately 231,000 signatures needed to place a referendum on the ballot during the 90 days, the law will be on hold until the election in November.

Public opposition to the bill was intense and the Democrats' chances of getting a referendum are "very good" but it's hard to say how it will do in November, said Ohio State University political science professor Paul Beck.

"If the vote were held right now, the bill would be overturned," said Beck. "The real question is will the intensity survive between now and November."

The bill requires public employees such as firefighters, police officers and teachers to pay at least 15 percent of their health insurance premiums, and would get rid of automatic pay increases and replace them with merit or performance pay.

Employees would not be required to pay dues to a union if they refuse union membership, and public employers would not be allowed to automatically withdraw payroll funds for deposit into a union political action committee.

One of the biggest problems for unions has been a change that does away with binding arbitration in contract disputes, letting the legislative body choose their own offer if negotiations fall apart. Opponents say this effectively ends collective bargaining, because the employer always is able to come out on top.

Republican State Sen. Bill Seitz, who voted against the bill, called this a "heads I win, tails you lose" proposition.

Public employees can still bargain on issues related to wages and certain working conditions, but not health care, sick time or pension benefits.

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April 1, 2011