The report found Tennessee has made progress in raising income levels of state residents since 2000, but the statewide per capita average is still only 90 percent of the national average.
The national per capita income average is $33,000 a year.
Williamson County, a suburb of Nashville, is the state's wealthiest community, with an annual per capita personal income of $44,298, the report states.
In contrast, residents of rural Hancock County in East Tennessee bring home $14,885 a year, or about one-third the Williamson County average.
The report is a supplement to the 2007 economic report to the governor by UT's Center for Business and Economic Research.
Bredesen did not ask for the supplemental report, but UT economics professor Matt Murray decided it was time to look at income disparities in Tennessee.
"This should serve as a bit of a wakeup call that we need to raise education standards," Murray said. "It's a tough world out there and everyone needs a good education."
Raising the minimum wage would put more in workers' pockets and taxing the rich would increase government revenues, but those won't close the income gap, Murray said.
He said it's important to the state economy to raise the income levels of Tennessee's poorest residents and that a better-educated work force will attract higher-paying jobs to Tennessee and its rural communities.