YELLIN: And this fight could be coming to your backyard very soon. Forty-five states face some sort -- face some sort of a budget crisis. And tomorrow Ohio could become the next Wisconsin. State workers plan a big protest in the state capital of Columbus, even as President Obama flies into Cleveland to promote his own jobs agenda.

Just like in Wisconsin the fight in Ohio centers largely on collective bargaining. In a nutshell, that's when workers ban together to negotiate their own pay and benefits instead of every single employee making his or her own deal. With me now is Ohio's new Republican governor, John Kasich, who supports the bill that would sharply role back public employees collective bargaining rights. Governor, thanks for being with us. First of all --

GOV. JOHN KASICH (R), OHIO: Thank you.

YELLIN: -- you're expecting a massive protest tomorrow of -- by public workers at the state capital, objecting to your plan to roll back their collective bargaining rights. In Wisconsin they're facing a possible government shutdown over a similar issue. How far are you willing to take this?

KASICH: Well, Jessica, you know this is not really just about collective bargaining. We have an $8 billion budget hole in Ohio. We have a third of our college students that leave Ohio after three years. We've lost 600,000 jobs in the last 10 years. Only California and Michigan have lost more than that. And part of the reason why we are pushing collective bargaining is we frankly want to give the managers in our local communities and our schools the ability to control their costs so they don't have to raise taxes and drive businesses out and more jobs out.

YELLIN: You are clearly in a fiscal hole and you need to clean it up. The question is why not negotiate with public unions who have been willing to take cuts in the past instead of going after the heart of what makes unions a union their collective bargaining rights?

KASICH: No, no, no. Look, it's right to be able -- for them to be able to negotiate on their salary, but we need to let managers be able to determine things like keeping their pension system healthy, making sure that the cost-related, the health care are consistent with private sector workers. For example, in the state of Ohio the average private sector worker pays about 23 percent of their health care costs.

In our cities the average worker is paying nine percent. This is all about restoring some balance to the system. Right now when they wrote this bill almost 30 years ago it was done on a strict partisan basis where all the power was shifted to labor. What we are trying to do here is to balance it out. To make sure that management has some power and some tools to create -- to control their cost. And at the same time where the unions want to keep talking and negotiating that's fine, but we don't support binding arbitration where an outsider comes in and imposes a settlement on a community the community can't afford.

YELLIN: In this environment with these huge budget deficits clearly some give on both sides is essential. But even State Senator Shannon Jones, who sponsors the bill that would curtail the collective bargaining right said in testimony that the bill will not solve Ohio's immediate budget problems. So let me ask you to step back a little bit. Is this in a way a political move to gut unions?

KASICH: Jessica, I think I have answered it. Look, we don't just have a fiscal crisis here. We have a jobs crisis in Ohio. The problem is we are not competitive. And if we can't control our costs and reduce our taxes and be able to be in a position to reduce our regulations the jobs are going to continue to leave.

And when the jobs leave our families are hurt, our communities are hurt. So this is all about a multiple -- multiple approach to trying to one, give people an ability to cope with less dollars that they're going to get, number two, allowing us at the state to be able to control our dollars --

YELLIN: If you talk to any CEO of a major corporation one of their top concerns is how prepared are their workers? And part of that is education. In Ohio teachers make on average $54,000 a year. Now under your proposal, 29 percent of that could go to -- would go to pensions, so how can you keep and recruit teachers with that --

KASICH: Wait, first of all -- first of all -- first of all, Jessica, Senator Jones' bill is not my bill. And we're working together and I support her efforts. But you know the bottom line on teachers are in some of our school districts teachers actually contribute zero to their pension. Now that is not a system that can last, Jessica. See part of the problem is our public employees have been over-promised. And I don't want to -- look, I grew up in a town --

YELLIN: So can I just ask you that number too high --

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KASICH: It was pro-union. I don't --

YELLIN: Are you suggesting there is room for compromise here? KASICH: Wait a minute. All we are saying to you, Jessica, is the people that run the schools ought to have control over things like health care costs and like pensions. The teachers ought to have say about their salaries. Those are the things that we are talking about. And again, it is taking the law that was passed strictly along party line votes 30 years ago and restoring some balance to it. I think that is very fair.

YELLIN: Governor Walker --

KASICH: And so that the direction we are going.

YELLIN: Governor Walker in Wisconsin I know you have spoken with him, he is facing a similar situation. What was his advice to you?

KASICH: Well, you know we talk. I was -- you know personally I liked him when I first met at our first Republican Governors Association meeting. I talked to him today. You know we are just both committed to fixing our state. The Midwest has been absolutely hammered economically. You know the South does well. The Southwest does well. We are finding out in California they're doing terrible because they haven't controlled their costs, so what we are trying to do is to save our states, Jessica. This is not about an attack on anybody, a political issue. This it is about creating an environment so people can be hopeful again.

YELLIN: President Obama finally is coming to your state tomorrow. He's going to be in Cleveland. What is your message to President Obama?

KASICH: Well, I am there to greet him. I mean President Obama came to Ohio 12 times to try to defeat me and guess what, he didn't win? My message to him on anything is give us the flexibility we need to run our state. And frankly that's what I am going to ask him for. He is the president of the United States.

I think it is my job to be there to welcome him to Ohio on his first visit since he is president and I'm the governor. I don't expect a long conversation. If there is any one thing he would ask me for I would say more flexibility particularly on Medicaid so we can serve the population of people that need health care, just you know get -- release the strings.

Allow us to be able to manage our state better in a whole variety of ways, but tomorrow is not designed to be some confrontation. It is to welcome him to our great state. And he is the president, I'm the governor, and it's a pretty amazing situation.

YELLIN: Governor Walker said that the president should butt out of state business. That's not his exact quote. He said he has his own issues to worry about. You don't feel the same way?

KASICH: Well no, I mean Jessica, my feeling about that is when I left Washington we were running a surplus. The economy was growing. Jobs were being created. We cut taxes on risk taking and investment. I think the president needs to keep his attention and focus on the problems in Washington with a $14 trillion deficit and frankly a budget that took a pass this time.

So, you know let him deal with his situation. Let me deal with mine in Ohio. Just give me my flexibility. Give me some of my money back. You know well I'll tell you one thing they did. They wanted us to have high speed rail. I said I don't want that money. It'll put us in the hole. Give us the money and let us use it to fix our freight trail lines here.

You know what they did? They gave it to somebody else. He said if you don't want to give it to me, don't spend it. So you know I mean there is a little frustration here. But look, bottom line is he is the president of the United States. He deserves respect. But focus on your, on your agenda. Let me focus on mine.

YELLIN: All right, this is going to be a fight that will go on for weeks, maybe months. We'll continue to check in with you. Thank you, Governor Kasich.

KASICH: Thank you.