* Walker says law protects taxpayers, jobs
* Other states weigh harsher collective bargaining limits (Adds Iowa action, paragraphs 8-10)
By James Kelleher
MADISON, Wis, March 11 (Reuters) - Wisconsin’s governor signed into law on Friday sweeping limits on collective bargaining rights for public sector workers that have ignited a national debate over unions as other states weigh similar curbs.
In a setback for U.S. organized labor and its Democratic allies, Republican Governor Scott Walker signed the measure passed by the legislature this week that eliminates most bargaining rights for many state government workers and increases their contributions for pensions and healthcare.
In the three weeks since Wisconsin took up the issue, large protests in Madison and other state capitals signal grass-roots support for collective bargaining rights and for unions, analysts say.
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Walker said the law was aimed at protecting taxpayers and jobs, arguing it will improve the business climate and help the state’s private sector create 250,000 jobs. He has said the state needs the restrictions on bargaining to deal with funding shortfalls as the state contends with a $3.6 billion deficit in the upcoming two-year budget.
With the signing, Walker canceled layoff notices he sent last week to Wisconsin public sector unions.
“While tough budget choices certainly still lie ahead, both state and local units of government will not have to do any mass layoffs or direct service reductions because of the reforms contained in the budget repair bill,” Walker said in a statement.
To avoid conflicts with their employees, some local governments are rushing to reach contracts with unionized labor to beat the restrictions on bargaining, which take effect when the law is published.
Lawmakers in other states pressed ahead with their own plans to curb the rights of public employee unions.
Legislators in the Iowa House passed a Republican bill that would limit collective bargaining by public sector workers and require them to pay $100 a month toward their healthcare. It also would prevent bargaining on healthcare benefits for government workers and forbid them from negotiating over layoff schedules.
The bill’s prospects of becoming state law are bleak. Democrats, who have the majority in the Iowa Senate, said they have no intention of considering the measure. (Additional reporting by Jeff Mayers and Kay Henderson; Editing by Andrew Stern and Vicki Allen)