Governor Creates 2 Reform Panels : Government: They will study how to keep the state competitive in business and reduce fraud, waste.

Trying to buttress his support within California’s corporate community, Gov. Pete Wilson on Friday announced creation of two blue-ribbon panels that will recommend how to make the state more competitive in business and reduce government waste.

One will be called the Council on California Competitiveness and take aim at environmental regulations--the red tape, not the standards, Wilson said.

The other will be called the Governor’s Commission on Efficiency and Quality in State Government and be modeled after the federal Grace Commission that former President Ronald Reagan created nearly a decade ago to help reduce bureaucratic “fraud and waste.”

Gubernatorial aides said Wilson has not had time to select people to head these panels because he has been focusing on legislative and congressional redistricting, the current obsession in the state Capitol. But they said the governor did not want to pass up the opportunity to announce his plans while speaking Friday to an annual breakfast attended by 1,200 leaders of business, finance and agriculture.

These people represent the core of Wilson’s political constituency and he took pains to explain why he recently had to raise taxes and fees by $7.5 billion to close the state’s $14.3-billion revenue gap. Even if he had fired all state workers, closed the universities and opened the prison gates, he would not have found enough savings to make ends meet without a tax hike, Wilson told the largely conservative audience.

Acting on the advice of his senior strategists, Wilson began trying to put the massive tax increase behind him and look beyond the present reapportionment battle to a more politically salable agenda, one he talked about repeatedly during his election campaign: making California more competitive economically and its government more efficient.

“It’s the beginning of the fall line,” quipped one adviser, referring to the governor’s speech.

Wilson pointed out that California is competing for job-producing economic development with other states that offer cheaper housing, lower wages and less government regulation. “Nevada is offering free hotel rooms and $20 in chips,” he joked.

The council on competitiveness, with roughly 10 members from business, labor and academia, will examine government red tape, the proliferation of lawsuits and education of the work force, the governor said. He especially cited “cumbersome and often conflicting” environmental regulations as a hindrance to business.

“Not that we’re going to compromise in terms of our commitment to protection of California’s natural treasures,” said Wilson, who has enjoyed broad acceptance among environmentalists, “but I sometimes think that if the Almighty had been compelled in making the magnificent Sierra (and) this pristine seacoast to await the verdicts of an environmental impact study, by God, the people would be here but the mountains and the seashore wouldn’t.”

The audience responded with a faint chuckle.

The Commission on Efficiency and Quality--which the governor’s office was dubbing “the little Grace Commission”--will be made up of several dozen people from the business community.

Reagan’s federal commission--officially named the Private Sector Survey on Cost Control--was chaired by industrialist Peter Grace. According to Reagan in his autobiography, it made 2,478 cost-cutting recommendations, of which about 800 were implemented, “saving taxpayers tens of billions of dollars.” It also provided the President with unending fodder for his political speeches, something Wilson’s panel undoubtedly also will do for him.

“My friends, I believe in marketing,” Wilson told his business audience. “I’m the son of an advertising man. . . . We’re going to change what needs to be changed in California. We’re going to have a good story to tell. And then we will do marketing like they’ve never seen.”

Bill Livingstone, the governor’s press secretary, said both panels probably will complete their reports sometime next year.