LANSING — Economic growth is slowing in Michigan, but there still is no recession in the three-year forecast.

That's the message economists are expected to give Friday, when they meet with officials at the Capitol to figure out how much tax revenue the state can expect to collect through 2022.

The twice-yearly forecasting conference is an essential step in the state budget process.

Although Democratic Gov. Gretchen Whitmer and Republican lawmakers only just ended their wrangling over the 2020 budget, it's almost time to set the budget for 2021. Whitmer has to present that spending plan to lawmakers no later than Feb. 7.

The state's finances are healthy, analysts say, but more pressures are coming.

The reason? Tax cuts have canceled out much of the extra revenue resulting from a decade of slow but steady economic growth, and spending keeps going up.

"Long story short, there remains no shortage of demands on a very constrained general fund," which is the state's main checking account, said Kurt Weiss, a spokesman for the State Budget Office.

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Here are 12 things to know about Michigan's budget picture:

Revenue estimates are up

The last time officials estimated state revenues was in May and revenues have been better than expected since then. According to the House and Senate fiscal agencies, combined general fund and School Aid Fund revenues are doing about $330 million better than expected for 2019, between $283 million and $413 million better for 2020, and $417 million to $539 million better for 2021.

Here's why

The main reasons for the 2019 boost were higher-than-anticipated corporate income tax revenues and lower-than-expected refunds issued under the old Michigan Business Tax as a result of corporations cashing in tax credits, both agencies said. For 2020 and 2021, analysts expect continued growth in personal income tax and sales tax revenues.

General fund remains flat

Despite the adjustments, net general fund revenue — the amount available to be spent — is expected to remain mostly flat through 2021 because of money allocated to reimburse local governments for the loss of personal property tax revenue, formerly paid by manufacturers, and because of up to $600 million a year from the general fund allocated for road and bridge repairs. A 3.3% boost is projected for 2022.

School Aid Fund doing better

Growth in net School Aid Fund revenue should be more robust, with the House Fiscal Agency projecting increases of 1.9% in 2019, 2.8% in 2020, 2.9% in 2021, and 2.4% in 2022.

Still recovering from Great Recession

Despite years of slow and steady job growth that began late in 2010, Michigan still has about 243,000 fewer workers than it did in January 2000, according to the House Fiscal Agency report. Also, employment growth in Michigan since 2017 has generally lagged behind that of the nation as a whole.

Job growth has slowed

From the House Fiscal Agency: "Through November, Michigan's wage and salary employment has grown by about 23,600 jobs in 2019, far below the 45,200 jobs during the first 11 months of 2018." Growth is expected to continue, but at a slower rate than that of recent years.

Auto sales expected to dip

Sales of cars and light trucks, which have been at record highs of 17 million units in recent years, are expected to decline slowly, as are the Big Three's share of those sales, which have the greatest impact in Michigan. Big Three auto sales are expected to decline from 6.9 million vehicles in 2019 to 6.7 million in 2021 and 2022.

Pot sales provide a boost

Revenues from the state's 10% excise tax on marijuana, which is newly legalized for recreational use, are expected to climb from about $98 million this year to $143 million in 2021, Chief Deputy Treasurer Jeff Guilfoyle said at the Michigan Economic Forecast Forum at the Kellogg Hotel and Conference Center Thursday. The 2021 tax estimate is based on marijuana sales of more than $1.4 billion next year.

New spending pressures

Among the increased costs the state is facing, Weiss cites rising Medicaid costs going up and a reduced federal match rate for the Children’s Health Insurance Program. He also cited new legislation related to providing improved legal defense to the indigent and raising the age to 18 from 17 for adult criminal prosecutions. He described both as "good policy (that) will cost money." He noted the state is also facing numerous lawsuits related to the Flint water crisis and from Michigan residents the state falsely accused of unemployment insurance fraud after an automated state system ran amok between 2013 and 2015.

Good news on income

According to the House Fiscal Agency, Michigan personal income is expected to increase 2.8% in 2019 and then jump to 4% in 2020 and 2021 as tight labor markets exert upward pressure on wages.

But also bad news

According to the Senate Fiscal Agency, "the gains do not reflect increases in wage and salary earnings," as much as they do "increases in dividends, interest, and rent (from stock market gains and higher interest rates), increases in transfer payments (attributable to federal fiscal policy), and a substantially lower inflation rate in 2019."

Michigan's per capita income, which ranked 12th in the nation in 1950, fell to 40th in 2010 before recovering to 33rd in 2018, at $48,423, Guilfoyle said. The 2018 figure is 89% of the U.S. per capita income, he said.

Saving for a rainy day

The state had just over $1.1 billion in its "Rainy Day Fund," formally known as the Budget Stabilization Fund, at the end of 2019.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4. Read more on Michigan politics and sign up for our elections newsletter.