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AS PRESSURE INCREASES to shrink government at all levels and make it do more with less, there is little mention of one of our most beleaguered institutions: the state courts.

Last week, a panel of federal judges released a draft report that addresses problems facing federal courts.While these problems are severe - at a time of rising caseloads and falling resources - it is only fair to consider the panel's recommendations in light of the burdens on the state courts.

Overwhelmingly, the nation's legal battles take place in state, not federal, courts. States handle more than 97 percent of all litigation, including criminal, housing and family related cases, which tend to affect people most directly.

It is no wonder that this year's front-page courtroom dramas - the trials of Heidi Fleiss, the Menendez brothers and O.J. Simpson - have been in state courts.

The report laments the 282,000 cases filed in federal district courts last year. But in that period more than 200,000 cases were filed in the New York City Family Court alone. And in 1992 (the most recent year for which national statistics are available), more than 33 million civil and criminal cases were filed in state trial courts - 100 times the number filed in federal court.

This disproportionate caseload is nothing new.

From 1985 to 1992, criminal cases increased 22 percent in the federal courts but nearly twice that in the state courts. Under current trends, more than 1 million cases a year will be filed in the federal system by 2020 - and more than 100 million in the state systems.

A common response to the problem of the nation's overburdened judiciary - a response reflected in the federal panel's draft report - seems to be that as long as the whole system is in trouble, why not at least save the federal courts?

Thus the report recommends that entire categories of civil and criminal cases be transferred from the federal to the state courts and that federal jurisdiction over cases involving citizens from different states be virtually eliminated.

Such an approach would serve the institutional interest of the federal judiciary, but it would not be in the interest of the millions who turn every year to the state courts seeking fair and efficient resolution of their cases.

A solution that eases the burden on the federal courts without taking into account the effect on the state court system is no solution at all.