(CNN) -- The Ohio state legislature has passed controversial legislation that would limit collective bargaining rights by barring Ohio's public employees from striking. The bill now heads to Ohio Gov. John Kasich's desk to be signed into law, possibly this week.

Kasich argues that Ohio Senate Bill 5 is crucial to closing an $8 billion budget shortfall and bringing public-sector benefits in line with those in the private sector.

The law will affect some 360,000 employees by barring their right to strike and allowing them to decline to pay union dues.

"With some of the highest taxes in the country, Ohio is struggling to create a climate that is attractive to the businesses that create jobs," Kasich said in a press release.

"Helping local governments reduce their costs so they can begin lightening Ohio's tax burden helps us compete better against states that are far friendlier to job-creators,' he said.

Wednesday night, the state Senate voted to concur with the amended Senate bill by a vote of 17-16. Six state Republicans joined all of the Senate Democrats in voting against the legislation.

Earlier in the day, measure passed the state House by a 53-44 vote, with two members abstaining.

Ohio state Democrats and union leaders are expected to begin collecting signatures to put the issue on the ballot for referendum in November in an attempt to repeal the law.

The Rev. Michael Harrison, a member of Protect Ohio Families, a pro-union group, said says the legislation is reckless and Kasich is using the budget shortfall to chop away at the rights of government workers.

"SB-5 proves that reckless Ohio legislative leaders care more about corporate special interests than Ohio families," he said.

"We need honest, responsible leaders who will protect Ohio families, not attacks on the shrinking middle class."

But Ohio Republicans say their local governments are broke and SB 5 is just what the state needs.

"They're not making their pension payments; they're not keeping up with basic infrastructure projects; they're cutting school programs; and they're eliminating essential services," said Senate Majority Whip Shannon Jones.

"It's time to put the scare tactics and political rhetoric aside and start dealing with reality," she said.