Gov. Gerald L. Baliles called on his new Commission on Excellence in Education today to "go a step further" than a goal of making Virginia's schools among the best in the nation and "compare and challenge ourselves by world standards."

Baliles charged the 18-member commission to be "bold and creative" in recommending ways to improve the public schools.

"Hot potatoes, sacred cows and turf questions are not off limits," he said during the commission's swearing-in ceremony at Patrick Henry High School.

Baliles said he created the commission to "add greater diversity of thinking" to the State Board of Education, whose nine members are included on the commission. Northern Virginians on the commission are Del. Dorothy S. McDiarmid (D-Fairfax), chairwoman of the House Appropriations Committee, and state school board members Adelard L. Brault of Fairfax and Susanne Thomas of Alexandria.

The commission held its first meeting here in conjunction with Baliles' first workweek outside Richmond. To demonstrate his "commitment to education," Baliles visited schools, sat in on school board meetings and met with teacher groups in his temporary office at Western Virginia Community College here.

Perhaps because the itinerary was arranged by an aide who was Baliles' campaign manager last year, the schedule had the trappings of a campaign. The governor kissed children, accepted gifts of art, flowers and Easter eggs, and took a turn as pronouncer at a spelling bee in which the winner successfully spelled Baliles' name and "inauguration." The later, the governor said, was "one of my favorite words."

In seeking solutions, Baliles told his commission it should consider, for example, following the lead of Minnesota and Florida, which allow advanced high school juniors and seniors to attend college, and South Carolina, which gives cash awards to schools with rising test scores and attendance.

Baliles said that under present formulas for distributing state aid, some school districts "do not yet enjoy truly equal educational opportunity. Achievement varies widely. Broad gaps exist in expenditures, pupil-teacher ratios, courses, teacher qualifications, facilities, equipment and teaching aids."

He gave commission members lists of good news and bad news about the state of Virginia's schools:

* Students score above national averages on both Scholastic Aptitude Test and National Assessment of Education reading exams, but they score below the national averages on math.

* While Virginia students rank seventh among the 22 states that administer college entrance exams, an estimated 766,000 residents are functionally illiterate and 38 percent of persons over 25 do not have a high school diploma.

* Higher academic standards have not caused an increase in the state's dropout rate, but 24 states have a lower failure rate.

* Teacher salaries and per pupil expenditures have increased dramatically, and SAT scores of prospective teachers also are improving. Nonetheless, teacher shortages "of serious proportions are predicted."