Still mulling a bid for the mayor's office, Councillor at-Large Michael Flaherty has ratcheted up the rhetoric against incumbent Thomas Menino. Flaherty last week released a statement hitting the Menino administration on the city's fiscal policies, calling them "dysfunctional" and "short-sighted."

The statement came as some political observers privately wonder whether Flaherty has had second thoughts about jumping into a race against Menino next year. Menino is showing all the signs of a definite run for a fifth term in '09.

"In these uncertain economic times, foresight and proper long-term planning are needed to dig our city out of its current budget hole," Flaherty said in a statement headlined "Progress is Impossible Without Change."

"However, recent news about the city's spending habits leave many residents doubting that our current management systems can put us back on track."

Flaherty pointed to the Boston public school system requesting another bailout at $9.9 million and a buy-back program for city employees for which Boston has paid $33 million.

Menino aides struck back with their own statement, saying the administration has "won praise from many objective sources for its fiscal policies, management systems, and long term budget planning." Menino proposed a $2.42 billion operating budget in April.

Menino aides pointed to praise from bond rating agencies, including Standard and Poor's March 2008 report, which said Boston's financial practices 'are strong, well embedded and likely sustainable."

Flaherty continues to post fundraising totals that lag behind Menino, who racked up nearly $100,000 in May. In filings with the Office of Campaign and Political Finance, Flaherty posted an $18,775 deposit to his campaign account, after an earlier deposit of about $16,000.