PERHAPS BECAUSE the stigma has faded, more mentally ill Americans are seeking care. That is good news.

But there's a price to pay. Demand outpaces mental health budgets, forcing community clinics to close, pushing people into emergency rooms, jail cells or the streets.

The pattern has been apparent for several years, but the state government has been, to use the jargon, in denial. Once again this year, state government predicted a leveling off or even a decline in cases. That kind of low-balling allows inadequate budgets.

Recently, the Department of Health and Mental Hygiene announced a "reconfiguration" to achieve savings ordered by a General Assembly dismayed by rising costs. Fewer people will be treated because their incomes exceed the new, lower limits. Patients in treatment now will not be dropped even if they don't qualify under new income guidelines, but those whose difficulties surface from now on could be turned away.

For the most part, victims of the current budget-balancing will be so-called gray zone patients, those who have too much income to qualify for Medicaid but are too young for Medicare.

Those who have been admitted are already getting less care: As the state tried last year to stay within an unrealistic budget, it cut services. This year, a new system will offer block grants - finite allowances. If the clinics don't have to chase around for reimbursement, the Department of Health and Mental Hygiene reasons, they can do a better job of managing their resources. Maybe, but the underlying problem of too much demand and too little money remains unsolved. Perhaps the state was more generous than it could afford, but it now has a system that hovers at or slightly above the crisis point.

The Assembly left the problem for Maryland's secretary of health, Dr. Georges Benjamin: prove you can manage the system with the money we give you. And he gets credit from the community clinics for making the best of a difficult situation. But more community clinics are closing - 13 as of March this year. Since then, four more have shut their doors, with two more in Baltimore on the verge.

It's time to face reality. Maryland freed itself from the shameful warehousing of years past, but it still treats mental illness as an afterthought. The system of community clinics - an undervalued treasure - has shown it can care for sick people outside hospitals.

These clinics have been at the front line of a war against ignorance and suffering. They deserve budgets based on an accurate assessment of needs, and political leaders with courage to provide the money.