In Virginia, state policy now favors treating the mentally ill, the mentally retarded, the handicapped and the alcohol- or drug-addicted in their own communities. That was meant to be an enlightened and humane change from the days of indefinite commitments in state hospitals and asylums.

But to work properly, community-based care requires much more than the $160 million the state is now providing. That was the overwhelming consensus based on recent public-hearing testimony of more than 700 witnesses from around the state. Virginia's Mental Health, Mental Retardation and Substance Abuse Services Board was apparently convinced. It has endorsed a request for a record $140 million in additional community-based health efforts from the state over the next three years.

Why is it needed? Because institutionalization is no longer the option of first or even last resort. Mental hospital patients, for example, have won the right to treatment in the least restrictive setting. Too often, the communities to which they return cannot meet the needs of those who are already there. The testimony on that score was particularly compelling.

A frustrated judge in Richmond, tired of handing out jail sentences to every mentally ill person who comes before him, pleaded for other options. Two psychiatrists work for the regional Community Services Board in Lynchburg; each is assigned 500 mentally ill clients. A representative from the Central Virginia Chapter of the Autism Society said that the nearest center for specialized services was five hours away by car. There are 33 applicants for the eight slots in the only group home for the mentally retarded in Bedford, Va. A shortage of community-based housing has prevented patients from being discharged from the Northern Virginia Mental Health Institute. Repeatedly, aging parents asked: What will happen to my dependent son or daughter after I die? In the past, those in need were shipped away to institutions.

Gov. Gerald L. Baliles should be commended for recognizing the sharpening sense of need behind the request for an additional $140 million. Without adequate funding, community-based care simply will not address the need that exist