While the national economic downturn is felt by other states, Comptroller Susan Combs said Texas collected $1.8 billion in sales tax revenue in July -- up 10.4 percent compared to one year ago.

"More than half the state's general revenue comes from sales tax. So you've got an increase compared to the same time last year. That's good news," said R.J. DeSilva, a spokesman for the comptroller.

At stores like the Austin Gift Company, sales continue to climb.

"We're up about three percent for the year, so we're happy with that with gas prices where they are," said Mike Diaz, storeowner. "I think there's everything's moving along, I don't feel like there's a major economic slowdown here in Texas."

Sales tax collections in July were about double what was projected in the budget. The Comptroller's Office said the growth is fueled by construction, manufacturing and oil and gas industries in Texas.

"Because of the higher oil prices we've seen so far, so that industry has done well with more drilling going on," said DeSilva.

Across the country, the picture's not so green. Sales tax revenues in other states have been flat or falling -- leading to cutbacks in state services or state employee layoffs in states like Tennessee.

"Texas is doing pretty well when you look at what's happening in those other states," said DeSilva.