In March, the Pew Center on the States and the Rockefeller Institute of Government released a study on revenue estimating in the states.  They found that in 2009,

the errors by states in forecasting personal income, sales, and corporate income tax collections added up to a $49 billion unexpected revenue shortfall.

Additionally:

In the states with biennial budgets, the task of estimating revenues becomes even more difficult, as estimators attempt to forecast the performance of revenue streams over two or even three years.

Would, then, it make sense for biennial-budget states like Washington to switch to annual budgeting?  Unfortunately, there’s no definitive answer.

Twenty states currently budget biennially.  To the extent that states switch from one method to the other, the trend has been to switch from biennial to annual.  The National Conference of State Legislatures (NCSL) has a very informative report on the subject here.  From the report:

There is little evidence of clear advantages of either annual or biennial state budgeting practices. . . .

Major advantages of biennial budgeting are said to be that it is conducive to long-term planning; that it allows more time for program review and evaluation; and that the process itself is less expensive and time-consuming than that of annual budgeting. . . .

the consensus is that forecasting is more accurate in states with annual budgets.  Accuracy in forecasting, in turn, reduces the need for special sessions of the legislature, supplemental appropriations, and reserves.

Biennial budgeting represents a commitment of policy direction and funding amounts for a longer period than annual budgeting; it also means that agency personnel have to spend less time in budget planning and presentations than under as system of annual budgeting. . . .

State experience suggests that nothing they can do about the length of their budget cycles can isolate them from external factors such as the condition of the economy and federal mandates.

NCSL also notes that some research has shown that states with annual budgets spend less per capita than biennial budget states, but they caution that this is not conclusive.  There are benefits and drawbacks to both.  As a staff member at NCSL told me, the question of biennial versus annual budgeting is really a case of the grass being greener on the other side of the fence.

According to an article in Stateline today, the governors of Iowa, Michigan, Florida and Pennsylvania are hoping to find that elusive greener grass by switching from annual to biennial budgeting (going against the long-term trend toward annual budgets).