Debt loads, income vary in mayor's race

If he is elected in the fall, giving up his lucrative law practice will reduce his income significantly, Flaherty said in an interview.

“I can and will make it work,’’ he said. “I will do what a lot of other people do in Boston every day, which is make it work through careful budgeting.’’

The Globe reviewed the personal financial data of Mayor Thomas M. Menino, Flaherty, and two other mayoral challengers, all of whom released their 2008 federal tax returns.

Flaherty, a five-term councilor at large, earned $219,395 last year, according to the tax return he and his wife, Laurene, filed. His council salary is $87,500, and he earned $131,895 as a partner at the firm Adler Pollock & Sheehan. Together, that is $44,395 more than he would make as mayor, a job carrying an annual salary of $175,000.

The Flahertys purchased their South Boston home, a three-family house on the prime Columbia Road waterfront with views of Dorchester Bay, in 2001 for $665,000, borrowing $425,000. In 2003, they bought a Cape Cod vacation house in Dennis for $379,000, borrowing $341,000.

Since the initial purchases, they have refinanced the mortgages on both houses, increasing the debt each time.

In the most recent refinancing, a year ago, they secured a note for $615,000 from the Mt. Washington Cooperative Bank of South Boston. At the same time, they received a home equity line of credit for up to $100,000 from the same bank, according to records filed with the Suffolk County Registry of Deeds.

Flaherty said he owes nothing on the line of credit, and the current balance on the mortgage is $586,000. The Boston house is assessed by the city at $818,100, down from a high of $876,900 in 2007.

The couple’s property in East Dennis was refinanced in March 2008, with a new mortgage of $350,000. Flaherty said the balance on the note is $341,000. The seven-room house is valued by the town at $404,600, down from $414,200 last year.

Flaherty said he has taken advantage of opportunities to refinance at lower interest rates while borrowing additional funds against the value of the properties.

“I’ve made good investments, and I was prudent and conservative when I would reach into the equity,’’ he said.

The Flahertys also reported net rental income in 2008 of $1,681 from two of the units in the Southie property. And they reported making charitable gifts of $3,650 last year.

Menino and his wife, Angela, reported an income of $184,768 last year, mostly from the mayor’s salary, and made charitable gifts of $12,552, according to their tax return.

They recently paid off the 30-year, $38,000 original mortgage on their single-family home in the Readville section of Hyde Park, said his press secretary, Dot Joyce. The house is valued by the city at $375,500, down from a high of $413,800 in 2007.

Second-term City Councilor Sam Yoon, who is also challenging Menino from an at-large seat, and his wife, Christina, a fund-raising consultant to nonprofit organizations, reported 2008 earnings of $106,044, mostly the councilor’s salary. They made charitable donations of $9,386.

The Yoons borrowed $250,000 toward the $350,000 purchase price of their condominium on Waldeck Street in the Melville Park section of Dorchester in September 2003, refinanced the $250,000 loan five months later, and obtained a $100,000 home equity line of credit in August 2005.

They are carrying a balance of about $35,000 on the line of credit, according to Jordan Newman, Yoon’s press secretary.

The four-bedroom unit is valued by the city at $465,600, up from $462,600 the previous two years.

Another Menino challenger, Kevin McCrea, a businessman, and his wife, psychologist Clara Lora, reported income of $58,581 in 2008, with charitable gifts of $1,939.

McCrea, who operates Wabash Construction, specializing in historic restorations, said most of his income was from rental properties, including one in New Orleans he said he renovated after Hurricane Katrina.

A family trust headed by his brother, Brendan McCrea, owns the candidate’s Victorian brick rowhouse on West Springfield Street in the South End.

The renovated four-story, 12-room manse is valued by the city at $2.2 million, more than 10 times what the trust paid for it in 1995 when it was a rundown former crack house, McCrea said.

Omission: A graphic accompanying a story in Monday’s Metro section on the personal finances of the mayoral candidates inadvertently omitted the 2008 income of City Councilor Michael F. Flaherty and his wife, Laurene. The Flahertys reported an income last year of $219,395.