(Adds S&P warning of downgrade, background on budget impasse, quote from S&P analyst)
March 3 (Reuters) - Standard and Poor's Ratings Services warned on Thursday it could downgrade Pennsylvania's AA-minus general obligation and other ratings by the end of March if the state's structural budget imbalance is not addressed.
The credit rating agency placed the ratings on a watch list as a budget impasse continues between Democratic Governor Tom Wolf and Republicans who control the legislature, leaving the state without a complete spending plan for the fiscal year that began July 1.
"The CreditWatch action reflects our view that a failure to pass a budget package for fiscal 2016 that addresses long-term structural balance could exacerbate the state's projected structural budget gap for fiscal 2017," S&P analyst Carol Spain said in a statement.
Wolf proposed a $32.7 billion fiscal 2017 budget last month, cautioning lawmakers about the state's $2 billion deficit "time bomb."
S&P also placed Pennsylvania's A-plus appropriation rating, single-A departmental appropriation rating, and A-minus moral obligation rating on the watch list.
(Reporting by Sangameswaran S in Bengaluru, additional reporting by Karen Pierog in Chicago; Editing by Saumyadeb Chakrabarty and Nick Zieminski)