Arroyo and Flaherty differ on significant policy issues that will likely come before the council this year.

Arroyo authored legislation to curtail the power of the Boston Redevelopment Authority, which exercises broad sway over real estate development in the city.

“I think it is important to separate planning from development, because the core money for the city comes from property taxes, yet through the BRA we have given exemptions to many corporations,” said Arroyo. “That affects homeowners in terms of their taxes.”

Flaherty, meanwhile, said he sees no need to separate the redevelopment authority’s planning and development functions. Rather, he said that the agency’s planning and development wings need to communicate better.

“I would like to see the BRA planning department plan right,” said Flaherty. “The BRA has the tools to do that.”

Most of the BRA’s urban renewal contracts, which allow the entity to take private land deemed blighted, will come due this year and the council will decide whether to renew the contracts.

Far-reaching decisions will also be made in the area of education in 2004. This spring, the school department will undergo a public process to decide on a new student assignment system to replace the current system. The current system mandates that half of the seats at each school be reserved for children bused in from other neighborhoods.

The council is expected to weigh in on the issue.

“I think the onus will be on this body to work with parents of school children and parents who feel shut out of the system,” said Flaherty.

White parents have been pushing for years for a reduction in the city’s busing policy, mandated by a court desegregation decree in the 1970s. A group of parents sued the school department on the grounds that the system discriminates against white children.

Flaherty has long supported a reduction in busing, which he says will save millions each year on transportation costs — money which they say can be spent on textbooks and other material improvements to existing schools.

However, activists representing people of color in the neighborhoods of Roxbury, Dorchester and Mattapan worry that children from those neighborhoods might not have as many choices if the city reduces busing.

“We know where the population is and where it will grow in the future,” said Arroyo. “I do believe the reassignment plan should include construction of new schools in locations where there are fewer schools. Even if people want to walk to school, there must be viable choices for all students.”

Flaherty would also try to increase the number of schools — by purchasing any that the Catholic Archdiocese might be selling.

“I have engaged Archbishop O’Malley in a dialogue about giving the city the right of first refusal on all school buildings the church is selling,” he said.

Recently, Superintendent Thomas Payzant admitted that Roxbury, Dorchester and Mattapan have fewer schools per student than do other neighborhoods.

“There may be some credibility to that, but we are not going to know unless we fully vet the issues,” said Flaherty in response to a query about the disparity.

A former school committee member, Arroyo blasted the poor performance of most city schools, contrasting them with the elite exam schools.

“We have a dichotomy,” he said. “People who don’t live in the city want to get into our exam schools. We need to look at the way we invest money, training of teachers and community programs.”

Flaherty said the most important issue the council can act on this year is substance abuse.

“We need to renew the push for adolescent detox facilities,” he said. “I also want to protect community health centers, which had major cuts at the state level last year.”

But the race between Flaherty and Arroyo was about more than issues. Flaherty’s victory keeps him in the coveted position of most likely successor to Mayor Menino.

“It’s clear people look to the presidency of the council as a stepping- stone to becoming mayor,” said Turner. “I think it is clear that Flaherty’s intention is trying to run for mayor. It was clear when he decided not to run for district attorney three years ago.”

Flaherty would not rule out an eventual run for mayor, but said he has no intention of running in the next election.

“I fully expect Mayor Menino to be a candidate in two years and plan to support him,” said Flaherty. “I’m happy where I am on the Boston City Council.”