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Roughly half the Utah students who enroll in programs after high school complete a certificate or degree, according to new report by Utah Foundation. The state's percentage of adults with some college but no degree is among the highest in the nation.

On Tuesday, Rich Kendell, a board member with Education First, said the failure of Utah's education system to train workers is holding the state back.

"You can't teach if you have seven-eighths of a degree," Kendell said. "You cannot go to Ernst and Young with two-thirds of a bachelor's degree. You've got to finish."

The Utah Foundation report, which was sponsored by Education First and Prosperity 2020, lists five "game changers" for improving higher education.

They include creating clear graduation requirements, increasing support for remedial education, streamlining course schedules, encouraging students to take a full 15-credit course load each semester and boosting performance-based funding for schools.

Most of those proposals reflect initiatives that are already underway at the Utah System of Higher Education. But the report found the state needs to spend more on rewarding schools for performance in order to increase graduation rates.

"Utah's not a powerhouse yet," Kendell said. "We'd like to be, but to do that we've got to invest more in education."

David Buhler, Utah's commissioner of higher education, said the Board of Regents has requested $5 million in ongoing performance-based funding from the Legislature.

Before the upcoming legislative session, his office will explain how it would divvy up the money, Buhler said. The specifics are still being worked out, but schools would be rewarded for instructional quality and how well they help students graduate.

"We think it's important that we have a model that minimizes the possibility of bad unintended consequences," Buhler said.

The call for increased investment in education comes after the announcement that Utah generated more than $600 million in surplus revenues this year. Lawmakers and policy makers have also discussed revising Utah's tax laws to generate new revenue.

Utah Foundation President Stephen Kroes said implementing the report's recommendations would not necessarily require a tax increase, noting the large budget surplus.

"We're watching carefully right now to evaluate that question," he said. "We're not recommending a specific course of action here, we're laying out some options."

But Kroes added that investment in schools has dipped since the one-two punch of a tax cut in 2007 and years of recession, which in higher education has meant a greater share of costs being shifted away from state funding and onto students.

"People don't like the concept of a high tax burden but it's always, in the past, been high because we have big needs," Kroes said. "If we're not meeting the needs in the future, we'll have to look at that."

Kroes said Utah currently appeals to businesses because of the low costs of land and labor and a light regulatory burden. But he said the state will need to begin investing in benefits in order to sustain growth in the future.

"We can't always be the low-cost location," he said. "At some point we've got to turn our attention to being the high-quality location."