Standard & Poor's tells FOX Business that California faces a downgrade to its outlook if the state doesn't pass a credible budget in time, as Democrat governor Jerry Brown continues to struggle to close a $15.7 billion budget deficit.

California must submit a budget June 15. S&P says that although California's economy is about an eighth of U.S. gross domestic product -- and is about the size of Italy -- its budget deficit is a huge 30% of all 50 states' budget deficit.

Gabriel Petek, an S&P analyst and co-author with analyst David Hitchcock of a new report on California's fiscal crisis, tells FOX Business in an interview that the state "faces a downgrade to its outlook" to negative "if it bungles its budget."

Petek says that S&P is "keeping a close eye on budget gimmicks" that the state has tried to use to paper over problems. Petek says that the most populous state in the