Madison School District voters on Nov. 4 will be asked to approve permanent tax increases in the district to head off projected multimillion-dollar budget shortfalls.

In a pair of 7-0 votes, the Madison School Board on Monday night approved a proposal from Superintendent Daniel Nerad to hold a referendum and to adopt a series of accounting measures to reduce their effect on taxpayers.

Nerad said the district would work "day and night" to meet with residents and make information available about the need for the additional money to avert what school officials say would be devastating cuts in programs and services beginning in 2009-10, when the projected budget shortfall is $8.1 million.

The referendum would allow the district to permanently exceed state revenue limits by $5 million in the 2009-10 school year, $4 million more the next year and an additional $4 million the final year — for a total increase of $13 million.

Because the measure is a "recurring referendum," it would give the district permission to build upon the previous year's revenue limit.

The cost to local property taxpayers eventually would be $14.3 million, although the district would receive $13 million in additional revenue, according to estimates released Monday by Erik Kass, the district's assistant superintendent for business services.

That's because under the state's school finance system, Madison, as a district with relatively high property values and high levels of spending per student, receives less state aid than local residents pay in property taxes.

District estimates show passage of the referendum would cost the district $436,000 in lost state aid in 2010-11, $822,000 in 2011-12 and $50,000 in 2012-13.

Nerad and board members said the accounting measures approved Monday, including creating a fund to spread the cost of facility maintenance projects over a longer period, will increase the amount of aid the district receives from the state, saving local property taxpayers money.

Before the votes, five residents addressed the board — three speaking in favor of a referendum and two opposed.

Active Citizens for Education, a district watchdog group, is opposing the referendum. Don Severson, the board's president, urged the board to wait at least 90 days before seeking a referendum, and he said the permanent $13 million increase amounts to a blank check.

Several School Board members, however, said the referendum is a responsible method of dealing with the state's school funding system, which restricts revenue growth to an average of about 2.2 percent a year while essentially forcing school districts to increase salary and benefits of employees — their largest expense — by at least 3.8 percent a year.

Board members defended the move to make the referendum permanent, saying the district might face a budget gap of $17 million if the referendum expired in three years.

At least two groups, Community and Schools Together, and Grandparents United for Madison Public Schools, are supporting the referendum.

Johnny Winston Jr., the School Board's senior member, told his colleagues to brace themselves for a "tough" campaign.