MADISON, Wisconsin (Reuters) – Wisconsin suspended enforcement of a new law reducing public sector union powers on Thursday after a judge ruled it had not taken effect, while Ohio enacted a similar measure curbing collective bargaining by state employees.

The Wisconsin announcement brought a new twist to political wrangling over the state's budget that has sparked massive pro-union demonstrations and made the state the epicenter of a national debate over similar proposals in several U.S. states.

It also could force Wisconsin to alter budget plans for the current fiscal year and the two-year period that starts July 1, said Mordecai Lee, a University of Wisconsin governmental affairs professor and former state lawmaker.

"Every day the judge's TRO stays in effect, it's going to screw up their accounting," Lee said.

Wisconsin had begun preparations to increase healthcare and pension contributions made by unionized state workers and halt automatic union dues deductions under the law approved by the Republican-led legislature and signed into law by Republican Governor Scott Walker.

The bill passed the state Assembly after non-appropriation parts were removed, allowing Republican senators under the legislature's rules to approve it without the Democrats who had left Wisconsin to avoid a vote.

Tensions continued after Walker signed the bill, with Democrats pressing a legal challenge to the way it was passed and state officials pushing ahead with its implementation.

Dane County Circuit Court Judge Maryann Sumi enjoined publication of the law by the secretary of state in mid March and reinforced that on Thursday in a two-page court order.

"Based on the briefs of counsel, the uncontroverted testimony, and the evidence received" the act "has not been published ... and is therefore not in effect," Sumi wrote.

Administration Department Secretary Mike Huebsch said he would suspend implementation of the law, though the department believed the bill has been legally published and is law.

OHIO LAW, PROTESTS

Similar legislation limiting collective bargaining and proposing other measures to curb unions or restrict benefits has been advanced in Tennessee and Michigan this year.

In Ohio, Republican Governor John Kasich signed on Thursday a controversial bill that curbs collective bargaining and bans strikes by about 360,000 public workers, one day after it received final approval from the legislature in Columbus.

"(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 grabbed most attention this year, Ohio is more important to the union movement, with twice the number of public sector union members.

The new law 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.

Ohio Democrats want to overturn the law in a referendum, banking on intense public opposition to the measure. Under Ohio law, the law does not take effect for 90 days.

Several other states are considering similar legislation and the issue is likely to be a factor in the 2012 elections.

In New Hampshire, the latest state where legislators are trying to limit public sector union collective bargaining, thousands of protesters rallied outside the state capitol in Concord on Thursday to oppose budget bills they say curb the rights for state workers.

Aside from spending cuts, a companion bill to the House budget which passed on Wednesday included an amendment that would put salaries and benefits of public workers at the discretion of their employer if a contract expires without resolution.

The move was proposed as a way to trim state employee wage costs by $50 million.

(Reporting by Jeff Mayers, David Bailey, James B. Kelleher; additional reporting by Jim Lekrone in Columbus and Lauren Keiper in Boston; Editing by Jerry Norton and Anthony Boadle)

COLUMBUS, Ohio (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.

A group that will likely be known as "We are Ohio" is already forming to gather petitions against the bill, and is planning a referendum rally on April 9 in Columbus to encourage people to be volunteer as signature gatherers, said Anthony Caldwell, spokesman for the Ohio SEIU.

"As soon as physically and legally possible we'll have those petitions out in every one of the 88 counties," Caldwell said.

"Working families across Ohio will make sure we gather as many signatures as possible to make sure we get this on the ballot," Caldwell said.

Republicans plan a campaign against the referendum, "to debunk the myths, the half-truths, and the lies the fat cat labor bosses have been spewing in Ohio, Wisconsin and other states," said Kevin DeWine, chairman of the state Republican party.

"There will be a full-throated defense of (the bill) and our leaders who helped fight for its passage," DeWine said.

DeWine said people have made false claims that salaries will be cut in half and pensions will be gone.

Beck said one problem Republicans face is that if there is a referendum, the law will be frozen, so no one will be able to tell if it does any good. On the other hand, voters will be feeling the effect of Kasich's budget cuts in schools and other agencies.

"I think we'll see the bad news before there's good news," Beck said.

(Writing by Mary Wisniewski; Additional reporting by Jo Ingles; Editing by Greg McCune)

WASHINGTON (Reuters) – U.S. traffic deaths dropped by 3 percent to a record annual low of 32,788 for 2010 even as motorists drove more in an improving economy, projected government figures showed on Friday.

Fatalities have dropped 25 percent over the past five years, which transportation officials and highway safety advocates partly attribute to increased seat belt use, better vehicle safety, and stronger regulations on teen driving.

Transportation Secretary Ray LaHood said too many people are still killed in preventable crashes.

"We will continue doing everything possible to make cars safer, increase seat belt use, put a stop to drunk driving and distracted driving," LaHood said.

The fatality rate of 1.09 per 100 million miles traveled for 2010 also reflects a steadily declining trend since the middle of the last decade.

Total vehicle miles traveled last year increased by 20 million miles, or 0.7 percent compared to 2009, an indication of a strengthening economy.

Figures released on Friday represent totals submitted by the states to the U.S. Transportation Department for the first nine months of the year.

The agency projects totals for the final quarter, a calculation that is usually an accurate predictor of the full year figure.

A regional breakdown showed the greatest drop in fatalities occurred in Washington state, Oregon, Idaho, Montana and Alaska, where they fell by 12 percent.

Arizona, California and Hawaii had the next steepest decline, nearly 11 percent.

(Reporting by John Crawley)