ALBANY, New York (Reuters) – The New York state legislature on Thursday passed a $132.5 billion spending plan, closing a $10 billion deficit with no new taxes or debt and instead relying on harsh cuts to education and healthcare.

Having been passed by both the Republican-led state Senate and the Democratic-controlled state Assembly, the budget will now be sent to Governor Andrew Cuomo to sign. It is the first budget since 2006 to be passed by the April 1 deadline.

"Tonight the legislature not only passed an on-time budget, but a historic and transformational budget," Cuomo said.

The budget, which cuts total spending by 2 percent, also calls for the layoff of 9,800 state employees unless public employee unions concede $450 million in savings in pay and benefits.

The budget is an early victory for Cuomo, who persuaded the legislature to back almost all of his plan by threatening a government shutdown in the event of an impasse.

New York has one of the country's biggest budgets and the state is one of the top issuers of municipal bonds in the nation. These factors all intensify scrutiny of its budgets in the $2.9 trillion municipal bond market.

Many other states also are grappling with huge deficits -- a legacy of the 2008 financial crisis. But some of them, including California and Connecticut, are mulling significant tax increases. Illinois in January blazed the tax raise trail, enacting a 67 percent increase in state personal income taxes.

New York's fiscal 2012 budget cuts more than $1.2 billion from state aid to local school districts and reduces spending on the state's Medicaid program by $2.8 billion.

The budget sets an annual cap of $15 billion on Medicaid spending and ties future spending increases to a national index. Similarly, future education spending will be linked to personal income growth.

"Difficult and painful decisions had to be made to address the fiscal reality facing our state," said Assembly Speaker Sheldon Silver.

The list of legislative plans Cuomo beat back included a tax on New Yorkers who earn more than $1 million per year, which was sought by Silver and other Assembly Democrats. That proposal was meant to replace a surcharge on singles who earn more than $200,000 and couples who earn more than $300,000, which will expire on December 31.

Republican Dean Skelos, the Senate majority leader, tried to ensure that prisons were closed in both Democratic and Republican districts but the final plan lets Cuomo make the choices without legislative approval. With that exception, Skelos and Cuomo were largely in lockstep throughout budget negotiations.

"You can't tax your way into prosperity, you can't tax your way out of economic problems," Skelos said. "We have sent a message to the business community that we want you to stay here, grow here, invest here and create jobs here."

The budget merges a number of state agencies and cuts agency budgets by 10 percent, nearly across the board.

It also puts Wall Street, the state's economic engine, under a new regulator. Cuomo merged the state's banking and insurance departments into a new Department of Financial Services, which will gain oversight of new financial products.

(Editing by Joan Gralla and Mohammad Zargham)

COLUMBUS, Ohio (Reuters) – Ohio's legislature on Wednesday passed a Republican measure to curb the collective bargaining rights of about 350,000 state employees, and Governor John Kasich said he will sign it into law.

Its passage marks another success for Republicans who are pursuing measures in several states to limit the rights of public-sector unions. Unions are a key constituency of the Democratic Party.

The bill, which also bans strikes by unions for public employees, was approved in the Ohio Senate late on Wednesday following its passage in the state House of Representatives earlier in the day.

Kasich, a Republican, did not indicate when he would sign the bill but he is expected to do so by Friday. When the bill is enacted, Ohio would become the most populous U.S. state this year to impose sweeping collective bargaining curbs on public sector unions.

Kasich said the bill will put taxpayers and public employees on a more equal footing regarding pay and benefits.

Similar measures have spurred protests in Wisconsin, Tennessee, Michigan and other states.

Ohio Democrats hope to put the new law on the ballot for a referendum vote in November in an effort to overturn it.

"The wheels are in motion" for a referendum battle, said State Senator Joe Schiavoni, a Democrat. "They're trying to take away these union members' rights."

"I'm hopeful and I feel confident that at the end of the day the referendum will overturn the law," he said.

During the debate, some Republicans said changes from an earlier version of the bill, including a modification that allowed police and firefighters to bargain collectively for safety equipment, improved it.

"The bill we have on the floor today has some blemishes but addresses major problems in the collective bargaining process," said State Representative Michael Henne, a Republican.

The amended bill removed jail time as a possible penalty for workers who strike. But it is in some ways tougher on unions -- it prevents nonunion employees affected by contracts from paying fees to unions and makes it easier to decertify a union.

Democrats decried such measures as proof the bill is a politically motivated attack dressed up as a budget measure.

The Wisconsin and Idaho legislatures have passed laws that limit collective bargaining rights for state union workers. Tennessee is reviewing legislation that would limit collective bargaining rights for teachers.

While Wisconsin has gained more national attention, Ohio is far more important to unions. It has the sixth largest number of public sector union members among all the 50 states, twice the number of Wisconsin. With many auto and steel and manufacturing plants, Ohio is also a union bellwether.

(Reporting by Jo Ingles and Mary Wisniewski; Writing by Mary Wisniewski; Editing by Will Dunham)

SAN DIEGO (Reuters) – A former manager at one of California's two nuclear power stations sued the facility's operators on Wednesday, claiming he was fired in retaliation for reporting safety concerns at the plant.

The suit against Southern California Edison, principal owner of the San Onofre Nuclear Generating Station, comes a year after the U.S. Nuclear Regulatory Commission rebuked the company for what the government called a "chilling effect" on the airing of safety concerns by employees.

In a March 2010 letter cited in the lawsuit and provided to reporters by lawyers for the plaintiff, Paul Diaz, 35, the NRC ordered Edison to address a workplace climate in which workers feared retribution for reporting safety issues.

According to the lawsuit, the NRC inquiry and letter were prompted by anonymous calls and e-mails from plant "insiders" raising concerns about "shortcuts on testing new generators, unreported safety violations, falsifying records and promoting a culture of cover-up."

The lawsuit also cited problems with chronic fatigue among workers caused by lengthy shifts and heavy overtime demands.

Edison spokesman Gil Alexander said in a written statement that the company had not yet been served with a copy of the lawsuit and does not comment on pending litigation.

"However, we can say that, by policy, SCE considers retaliation against employees who raise safety concerns a termination offense," the statement said.

Diaz filed suit in Los Angeles County Superior Court Wednesday, seeking unspecified damages. The complaint names Southern California Edison and his former supervisor.

The San Onofre plant sits on the Pacific coast near the border of San Diego and Orange counties, about 60 miles southeast of Los Angeles. The two reactors there went into commercial operation in the 1980s.

The state's only other nuclear power plant in operation is the Diablo Canyon facility, owned by Pacific Gas and Electric Company, near San Luis Obispo on the central California coast.

Diaz was first hired at San Onofre in 1999 as a security officer and later promoted into management, his lawsuit says. He left San Onofre in 2008 to work for a northern California company, then was recruited back to the plant in 2010.

His return preceded the NRC letter by a few months, his attorney, Maria Severin, told Reuters.

"Some employees came to him with issues they were afraid to bring up because they feared retaliation," Severin said. "So he brought them up. They (his supervisors) told him: don't be a superhero."

Diaz, then manager of business and accounting and project service, was fired in October 2010, his complaint states. The ostensible reason for his dismissal was poor performance, but the lawsuit does not give specifics.

(Editing by Steve Gorman and Peter Bohan)