Michigan's prison population rose last year but isn't expected to reach capacity until March 2008, the first time in years the state doesn't have immediate worries about overcrowding.
The number of inmates jumped by 820 to more than 49,000 state corrections officials say.
That was the first annual increase since 2002, but the pace of growth was slower than historical trends.
Corrections officials say the population projection is encouraging because unlike in the past, the date when the state could run out of beds is two budget years down the road, not one.
The state won't run out of beds in the future, officials say, partly because the state could reopen prisons that have been closed to save costs.
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