EDITORIAL DAVIS AWAKENS.

AT the beginning of the year, the state enjoyed a whopping $10 billion budget surplus. Now it looks at the very real possibility of a $10 billion budget deficit within the next year.

It's time for drastic action, and Gov. Gray Davis seems to have woken up, but it's not clear whether he will actually deal with the looming crisis before it becomes a catastrophe.

Last week, he ordered most state agencies to prepare budgets for the next fiscal year that cut spending by 15 percent.

It's a good first step.

It's no secret that there's much waste, lots of fat and plenty of inefficiency in Sacramento. Forcing the departments to show how they'd get by with 15 percent less should make it easier to distinguish what's necessary from what's bloat, which programs work and which ones don't, which bureaucrats are earning their salaries and which ones are merely collecting their paychecks.

But why wait until next year? With state revenues falling fast, there's no reason to continue needless spending any longer than necessary. If Sacramento were to start cutting back this year, next year's deficits might not be so overwhelming.

Seeing that Davis has already picked up his ax, he might as well start swinging it.