The institute’s fourth Tennessee State Budget Primer provides an overview of the state’s finances, including major revenue sources, spending priorities and fiscal challenges. Brian Straessle, executive director of the Sycamore Institute, said Tennessee relies heavily on sales tax revenue, which accounts for about two-thirds of the state’s income. He noted the state also faces growing challenges in paying for road construction and maintenance because gas tax revenue has not kept pace with inflation. Tennessee’s 7% state sales tax rate is the second-highest in the nation. The report indicates Tennessee also could be required to cover up to 15% of SNAP benefit costs beginning in federal fiscal year 2028.