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The real budget is written in May, after the tax receipts from the April 15 deadline have been computed and the state has a firm idea of how much money will be available. It is this document, called the "May Revise" in the Capitol, that serves as the foundation of the new spending plan and is at the core of budget deliberations in both houses as lawmakers and the governor hammer out priorities.

In mid-May, Gov. Gray Davis' Department of Finance will disclose the latest May Revise, and it promises to be an interesting document indeed.

First, all signals reflect a stronger economy than earlier predicted, which means there will be more money to play with. With Democrats running both houses and a Democrat in the governor's office, the final budget will be a priority list of Democratic spending, even though some Republican votes will be needed in each house to attain the two-thirds majority required to pass the budget.

Second, the May Revise will be a bonafide Davis budget, unlike his January proposal, which was written mostly by the staff of former Republican Gov. Pete Wilson. That means that Californians should get a sharper picture of the governor's priorities and goals than has been possible during three months of canned media events and sparse news conferences.

Third, the May Revise is the traditional beginning of serious budget negotiations between the parties. It will be instructive to see what Davis, the self-professed moderate, offers to the liberals in his own party who have high expectations for significant social spending. In fact, it will be interesting to see what he offers anybody, because he is prone to play his cards close to his chest and has given little indication -- outside of education -- what he plans to do. Too, he must line up GOP votes to get the budget through the Legislature. What can he offer them to convince them to vote for the budget?

This will be the first time in 16 years that a Democrat has the power to sign or veto the state budget. But if Davis' statements about his moderation and caution are true, the chances are that his first budget is not likely to be much different than Pete Wilson's.

Thanks for the latest issue (http://www.capenq.com/newsletter/archives/1999/april99/0239.html). I'm glad to see you bringing up the subject of health care. As if medical insurance weren't already so expensive that 7 million Californians can't afford it, there are currently two bills being proposed to make it really skyrocket. These are AB88 and SB468.

They both are proposing that mental health treatment be fully covered by health insurance providers. Currently there is a 30-day limit imposed by insurance providers. Mental health is one of the most expensive categories of treatment there is. But it also has the highest incidence of fraud. In the state of Texas alone, there have been more than 50 mental hospitals closed down in the last year for fraud. A few months ago, "20/20" carried an excellent expose of psychiatric fraud in Florida.

I urge your readers to write their legislators, urging them to vote NO on any mental health parity laws. Governor Wilson vetoed the last one. New Mexico's governor just vetoed another in his state. I hope for all our sakes it doesn't make it through in California.

Marc Ferreira
Sunnyvale, Calif.

To the Editor,

Did you ever notice that as soon as government gets involved in a process, other than enforcing honest dealing, the costs go up and the service deteriorates? Ever heard of "the principle of subsidiarity"? It means things should be done at the lowest possible (personal) level in society, with movement to higher levels, e.g., family, church, community, state, federal, international being more and more temporary and exhortative.

When my son came down with rheumatoid arthritis 30 years ago, we were referred to Children's Hospital in San Francisco where we were told that if we were either rich or poor, we could get the kind of help the boy needed. Since we were neither, there was a policy of helping us in other ways. He received the treatment needed and is now Executive Vice President of a trade association.

Hospitals, doctors, nurses and charitable organizations regularly found ways to help those in need without a bureaucratic structure to interfere and ruin the process. A simple example is the prayer group we once belonged to. We passed a decorated coffee can around, and the amount in it grew to help anyone who needed to cover a utility bill, buy food, etc. It worked without regulation and many were helped, and in turn came back to help others. Then someone got the idea that we needed a committee to review the needs and carefully audit the funds. A. Donations fell off to nothing. B. The needy were intimidated from seeking help from an all-knowing committee. C. The prayer group died within a few months.

There is a lesson here that will be tough to re-teach with individuals and institutions too accustomed to sucking at the governmental sow's teats. Someone should make it a master's or doctoral thesis.   Jerry Todd

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