BRA approves pay boosts

The Boston Redevelopment Authority has beefed up its staffers' salaries for the first time in five years.

The agency, whose budget is separate from the city's, recently awarded 3 percent raises to all except the top employees.

"This was the right time financially to give a cost of living increase," said BRA spokeswoman Susan Elsbree.

BRA employees have had no salary increases — only pay cuts and reinstatements — since 2008.

In June 2009, amid the Great Recession, the BRA slashed the salaries of all but the lowest-paid workers and cut 24 jobs to help address a $4 million budget shortfall.

Those wages were restored in late 2011 as the economy improved and lease revenue from BRA-owned property increased.

The BRA payroll has shrunk from 268 workers in fiscal 2009 to 207 today. The agency has also cut back on travel.

"We're just better positioned now," Elsbree said. "There was a lot of cost-cutting and belt-tightening, and now we're on better financial footing."

The 3 percent raises increased the number of BRA employees who earn six figures, according to publicly available payroll data requested by the Herald. There are 34 staffers above the $100,000 salary level, eight more than last year.

The most senior staff — nine employees including BRA director Peter Meade — did not receive pay hikes. Meade has the highest salary at $164,640, followed by chief planner Kairos Shen at $160,680.

BRA positions range from administrative assistants and project managers, to architects, planners, engineers and researchers.

Meade recently restructured the BRA's economic development department after the departure of a key director.

He created a division of business development led by Randi Lathrop, known for her work in Downtown Crossing.

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The Ticker

Downtown Crossing pushcart vendors out

The Downtown Boston Business Improvement District is pulling the plug on pushcart vendors, right, at the end of the month.

The elimination of the vendors, who have been selling food and merchandise ranging from burritos to T-shirts and umbrellas since the late 1970s, comes as the property owner-supported BID prepares to develop a new street merchandising program for 2014.

The move has angered some vendors who fear being stripped of their livelihoods. They operate under a year-to-year agreement that expires at the end of March.

The BID hopes to implement a smaller, transition pushcart program beginning this spring that includes fewer carts as construction in the district stands to eliminate currently available locations. Current vendors will be required to reapply for available spaces.

Google axing 1,200 more Motorola jobs

Google is cutting an additional 1,200 employees in its Motorola Mobility hardware unit, as the unprofitable cellphone maker struggles to compete. Last summer, Google announced 4,000 Motorola job cuts. The layoffs will affect workers in the United States, China and India and account for about 10 percent of the company's headcount.

Boeing moves flight training to Miami

Boeing Co. said it is consolidating its North American flight and maintenance training operations in Miami, a shift that will move all flight simulators for the 787 Dreamliner and other aircraft out of the Seattle area.

Miami is the company's largest flight-training center and is preferred by airlines based in Latin America, as well as the United States, Middle East and Europe, Boeing said.

THE SHUFFLE

• The Training Associates has appointed Bill Bowman, left, as a senior consultant to work with senior management to secure private equity for company growth. Bowman previously served as CEO of U.S. Inspect and president of ChildrenFirst Inc., and was co-founder of Logal Software and Spinnaker Software Corp.
• Seven Step Recruiting has hired Doug Lubin as director of business development. He previously served as director of recruitment process outsourcing solutions at Yoh RPO.

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Ford C-Max outperforms Prius

Ford has been in the green marketplace for quite a while, but the C-Max CUV represents a giant leap forward in its effort to topple the vaunted Toyota Prius.

The C-Max replaces the discontinued Escape Hybrid and offers an entirely new vehicle.

Based on the Focus frame and powered by the familiar 2.0-liter Atkinson gas-electric motor, Ford claims you can run the C-Max on electric power up to 62 mph. The continuously variable transmission is one of the better ones I've used, shifting smoothly and effortlessly. The modestly priced entry has 56 cubic feet of storage with the split rear seats folded down and can comfortably seat five.

Squint a little and the SUV resembles the Prius, but it ends there. At 188 combined horsepower, it's much more powerful than the Japanese standard and faster to 60 mph. All this and the estimated fuel economy is just shy of the Prius.

But let's talk about Ford's advertised claim of 47 mpg. Despite my best efforts, I only cracked 40 mpg on a 30-mile highway run and barely managed 36 mpg on average for the week.

Scouting around the Web, I've found there's some fuzzy math permitted by the EPA to attain these figures and it's being questioned legally. Listen, 36 mpg 
isn't shoddy, particularly 
at nearly $4 a gallon for gas.

The C-Max is a solid performer on dry roads and in the rain, but is horrendous in the snow. I tooled around in a recent moderate snowfall and the C-Max struggled mightily. The front-wheel-drive-only option strained to pull the 3,600 lb. car up a snowy incline and, despite the traction control, the tires slipped continually. It did not inspire much confidence in New England wintry conditions.

Fortunately, most of the year we have better road conditions and it handled smartly, rode quietly and soaked up the road bumps. The regenerative brakes had an abrupt bite to them, but managed the car effectively.

The styling is typical of many cars in the CUV class. In this case, a familiar aerodynamic bullet-shaped body is accented with a low-slung hourglass grill, swept-back windscreen and some accented body creases ending with a squared-off hands-free lift-gate. Oversized wrap-around front and rear lights tie the package together.

You settle easily into the well-appointed and fitted interior and are met with a modern array of instrumentation. The upgraded MyFord infotainment center is easily run from the leather-wrapped steering wheel controls, but still needs more engineering to make it user-friendly. The dash features a variety of data, much of it related to the hybrid engine and batteries. One gripe is that the thick front roof pillar creates a bit of a blind spot that a small vent window tries to alleviate.

I'd take this car over the popular Toyota even though it gives up a couple of miles per gallon. It's more powerful and better looking with an upmarket interior that boosts this domestic entry.

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In a rising economy, politicians look for credit

WASHINGTON  — Increased hiring, lower unemployment, stock market on the rise. Who gets the credit?

It's a hotly debated point in Washington, where political scorekeeping amounts to who gets blame and who gets praise.

Following Friday's strong jobs report — 236,000 new jobs and unemployment dropping to a four-year low of 7.7 percent — partisans hurriedly staked out turf.

"Woot woot!" tweeted former White House economic adviser Austan Goolsbee. "With 12 million still unemployed?" countered Senate Republican leader Mitch McConnell's spokesman, Don Stewart.

When it comes to the economy, presidents usually get the rap for downturns and reap benefits from upturns. But the main factors affecting the current recovery and the record activity in the stock market may have less to do with high-profile fiscal policy fights in Washington than they do in the decisions of the Federal Reserve Bank, which has pumped trillions of dollars into the economy, kept interests rates at near zero and pushed investors away from low-yield bonds to stocks.

"From a policy standpoint, this is being driven primarily by the Fed," said Mark Vitner, an economist at Wells Fargo.

Yet to some, Washington deserves little recognition.

"Economies recover," said Douglas Holtz-Eakin, a former director of the nonpartisan Congressional Budget Office and now head of the American Action Forum, a conservative public policy institute. He acknowledged the Fed's monetary policies halted the initial free fall by the financial industry, but he said the economy has had to catch up to the Fed's low interest rates.

"It took a long time for the housing market for them to matter and for the auto market for them to matter," Holtz-Eakin said. "So I don't think that's a policy victory."

If Democrats are eager to give President Barack Obama acclaim for spurring the recovery with an infusion of spending in 2009, there are just as many Republicans who will claim his health care law and his regulatory regimes slowed it.

If there is common ground among economists, it is that the next step in fiscal policy should be focused on reining in long-term spending on entitlements programs, particularly Medicare, instead of continuing debates over short-term spending. But such a grand bargain has been elusive, caught in a fight over Obama's desire for more tax revenue and Republican opposition to more tax increases.

Obama and some Republicans are trying to move the process with phone calls and a dinner here and a luncheon there. Next week, the president plans to address Democrats and Republicans in the House and Senate in separate meetings to see, as he put it Saturday in his weekly radio and Internet address, "if we can untangle some of the gridlock."

Who gets credit does have political consequences. A strong economy would create more space for Obama to pursue other aspects of his second-term agenda. But it's an important question for the long term, too, because if the recovery is indeed accelerating it could validate the policies that the Obama administration and the Fed put in place.

Hiring has been boosted by high corporate profits and by strength in the housing, auto, manufacturing and construction sectors. Corporate profits are up. Still, it might be too soon to declare victory. While the recovery may be getting traction, the U.S. economy is not yet strong.

Economic growth is forecast to be a modest 2 percent this year. Unemployment, even as it drops, remains high nearly four years after the end of the Great Recession, with roughly 12 million people out of work.

Last year's early months also showed strong job gains only to see them fade by June.

March could prove to be a more telling indicator as the economy responds to a third month of higher Social Security taxes and as across-the-board spending cuts that kicked in March 1 begin to work their way through government programs. Economists say anticipation of the cuts already caused a downturn in the fourth quarter of last year as the defense industry slowed spending. The Congressional Budget Office and some private forecasters say the coming cuts could reduce economic growth by about half a percentage point and cost about 700,000 jobs by the end of 2014.

"My view is that aggressive monetary and fiscal policy response to the recovery has been a net positive," said Mark Zandi, chief economist at Moody's Analytics.

But referring to the automatic cuts, he said, "Fiscal policies have turned from a very powerful tailwind to a pretty significant head wind." And, he added, "the economy is going to be tested again in the next few months."

Obama has been distancing himself from the potential consequences of the automatic cuts, even though he signed the legislation that put them in place. Initially, they were designed to be so onerous that it would force all sides to work out a long-term deficit-reduction and debt-stabilization package. But that agreement never materialized.

If the recovery has been slow, White House officials argue, it is because Republicans have been unwilling to yield to Obama's demands for deficit reduction that combines tax increases and cuts in spending.

Obama himself seemed to touch on that viewpoint in his weekly address.

"At a time when our businesses are gaining a little more traction, the last thing we should do is allow Washington politics to get in the way," he said while heralding good economic news. "You deserve better than the same political gridlock and refusal to compromise that has too often passed for serious debate over the last few years."

Vitner, the Wells Fargo economist, argues that if anyone deserves credit for the recovery, it is the American public and American businesses "for being able to tune out all the noise that's coming from Washington."

"It's remarkable," he said, "that in the face of so much political uncertainty we've been able to see the growth that we have."

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Federal workers owe $3.5 billion in back taxes

WASHINGTON — The number of federal workers and retirees who owed delinquent income taxes jumped by nearly 12 percent in 2011, the Internal Revenue Service said Friday.

Nearly 312,000 federal workers and retirees owed more than $3.5 billion in back taxes as of Sept. 30, 2011, the agency said. The year before, about 279,000 workers and retirees owed $3.4 billion.

Overall, the 9.8 million workers included in the data had a delinquency rate of 3.2 percent. That's better than the general public. The IRS says the delinquency rate for the general public was 8.2 percent.

The Department of Housing and Urban Development had the highest delinquency rate, at 4.4 percent. The Treasury Department, which includes the IRS, had the lowest, at 1.1 percent.

Among independent agencies with more than 1,000 workers, the Government Printing Office had the highest delinquency rate, at 7.6 percent. The National Credit Union Administration had the lowest, at 1 percent.

House employees had a higher delinquency rate than workers for the Senate, but not by much. House workers had a delinquency rate of 3.7 percent, while Senate workers had a delinquency rate of 3.3 percent. Federal court employees had a delinquency rate of 2.7 percent.

The IRS says most residents who owe back income taxes file returns but cannot pay the full amount at tax time. Others have their tax bills increased through audits and cannot pay the higher bill.

The statistics on federal employees do not include those who are on payment plans. The IRS doesn't publicize the data but makes it available upon request.

The new data comes as many federal workers are facing unpaid furloughs because of automatic spending cuts known as the sequester. Many federal workers have already received furlough notices; others will receive them in the coming months.

___

Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

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Taking stock of U.S. job numbers

Taking stock of U.S. job numbers

Labor figures to tell if profit-rich cos. are hiring

All eyes will be on this morning's official Labor Department jobs report to see if a week when the Dow set new records can be capped by signs that profit-rich U.S. companies are ramping up hiring despite concerns about federal budget cuts.

"I think the fundamentals in the economy are such that it's appropriate to be cautiously optimistic about (today's) numbers," said Michael Goodman, a public policy professor at the University of Massachusetts Dartmouth.

The employment figures for February will likely reflect positive economic growth as the country hasn't yet felt the full effects of the budget cuts and tax hikes enacted by Congress, experts said.

The United States added an estimated 157,000 jobs in January, but that number is subject to revision. The nation's unemployment rate currently sits at 7.9 percent. Earlier this week, the ADP report showed 198,000 jobs added in February.

Massachusetts, meanwhile, reported an increase of 16,100 jobs in January. Even though unemployment remains steady at 6.7 percent, the Bay State's economy was buoyed by the creation of 92,800 jobs in 2011 and 2012 — 32,100 more than previously estimated over that two-year period.

"It suggests the state's emphasis on innovation and technology has paid off, but obviously there's still a long way to go before we're in a position where everybody who's looking for jobs in Massachusetts are able to find them," Goodman said. "But it's an important step in the right direction."

The Dow Jones industrial average continued its record run to close yesterday at 14,329.49. Weekly national unemployment claims also fell to 340,000, their lowest level in five years.

Continued economic growth can also cushion the expected slowdown that $85 million in automatic spending cuts will trigger at the state and national levels in the ensuing months, said Northeastern University economist Alan Clayton-Matthews.

"There will be a substantial amount of steam taken out of economic growth, but there is a substantial amount of steam to absorb the tax increases and spending cuts," he said. "We won't see the full effects of sequestration for another year probably, and hopefully within that period of time there will be another deal worked out in Congress to rapidly approach this deficit problem we have.

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Report lays new foundation for housing policy

The housing market is on the mend but experts say the healing process has been held back by "rigid" rules for buyers and lenders.

A bipartisan commission of former Cabinet secretaries, ex-senators and top housing and economic experts released an expansive new vision for housing policy last week, calling for a greater role for the private sector and a more limited role for the federal government.

The panel also advocated for the elimination of government-sponsored mortgage lenders Fannie Mae and Freddie Mac, along with reform of the Federal Housing Administration to improve efficiency.

"Today, a number of obstacles prevent a return to the conditions that prevailed in the late 1990s — before lax underwriting infiltrated the system and contributed to the crisis — and stand in the way of qualified borrowers accessing mortgage credit," the Bipartisan Policy Center's 136-page report states. "Restoring the appropriately conservative underwriting standards in place before the housing bubble, with their focus on the overall creditworthiness of the borrower, could help to improve the health of the housing market."

The FHA appears to be more cautious than it used to be. The report notes that in 2012 the average FICO score for an FHA loan was close to 760 on a range of 300 to 850, compared to the 710-720 that the average Fannie Mae and Freddie Mac borrower had in 2001.

"The pendulum may have swung too far in the wrong direction," said Nicolas Retsinas, director emeritus of Harvard University's Joint Center for Housing Studies, who served on the housing commission. "We want to make sure we are not so strict with our lending standards to facilitate a full recovery to the housing market."

Other obstacles discussed in the commission's findings include a lack of access to credit for well-qualified, self-employed individuals, potential "put-back" risk to lenders liable for government-backed mortgages that default, and the sale price of distressed or foreclosed homes used as comparisons in appraisals of non-distressed property.

Retsinas also noted that the housing recovery has been bumpy because several important federal rules are still pending

"We need to increase clarity and consistency for many lenders. We also have to create a system that doesn't favor large lenders," he said. "We need to have a level playing field."

Jennifer Athas, a licensed real estate broker, can be reached on Twitter 
@JenAthas.

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Copley Place builder may shop tower as luxury apartments

The stalled Copley Place tower project may come back to life as a luxury apartment high-rise.

The head of developer Simon Property Group recently hinted at a shift for the 47-story tower, which had been approved for 318 condominium units.

"We're still designing the building," CEO David Simon said during an earnings conference call last month. "But the idea that we're circling right now is to do mostly rentals, though there will be some condo element to it."

Simon spokesman Les Morris declined to elaborate on the plan yesterday.

The Boston Redevelopment Authority approved the 
$500 million project last fall but has not received any updates lately. Neither has the Massachusetts Department of Transportation, which leases the property to Indianapolis-based Simon.

The Copley Place tower would take several years to build. It would add a prominent glass structure to the Back Bay skyline between the Prudential and Hancock towers.

Greg Vasil, CEO of the Greater Boston Real Estate Board, said there's a strong market for apartments in Boston now. "With all the other projects in the pipeline, I'd assume they would want to move forward fairly quickly," he said.

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Mass., R.I. take income tax bites

Mass., R.I. take income tax bites

Tax season is upon us and the Herald's TaxSmart experts are here to help. Today, Art Ford of Sullivan Bille Group of Tewksbury discusses issues involving multi-state returns.

I work in Rhode Island, but live in Massachusetts. My employer took state taxes in both states. I was informed that I would be able to get the Rhode Island taxes refunded as I am a Massachusetts resident. However, when I did my taxes ... I ended up owing Massachusetts more taxes and receiving a third of my Rhode Island taxes back. Is this correct? Just seems wrong that I pay resident taxes in both states, but live in one.

— Mary Richardson

This is an example of a multi-state return.

As the reader suggests, these can be a pain, as the rules in each state are different and, in this case, both states have an income tax.

Your Rhode Island income must be included on your Massachusetts return, but Massachusetts allows a tax credit for taxes paid to Rhode Island.

The Massachusetts income tax rate is currently 5.25 percent.

Rhode Island has different deductions and exemptions than Massachusetts and it has three graduated tax rates.

Rhode Island has a rate of 3.75 percent on taxable income up to $57,150; 4.75 percent above that up to $129,900; and then 5.99 percent above $129,900.

So, if you are in the 3.75 percent Rhode Island bracket, there will be an additional tax to Massachusetts of 
1.5 percent.

Email your TaxSmart questions to bizsmart@bostonherald.com

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The Ticker

Facebook fixes feed

Facebook has redesigned the main attraction of its social network to address complaints that its website has turned into a jumble of monotonous musings and random photos.

In an attempt to breathe new life into Facebook's News Feed, the company will introduce new controls that allow people to sort streams of photos and other material into organized sections.

Facebook CEO Mark Zuckerberg, above, hopes to turn the News Feed into something more like a newspaper tailored to the particular interests for each of the social network's more than 1 billion worldwide users.

Zipcar shareholders OK Avis deal

Shareholders of Zipcar approved the Cambridge car-sharing company's nearly $500 million sale to auto rental giant Avis Budget Group. The deal is expected to be finalized next week.

U.S. regains wealth lost in recession

Surging stock prices and steady home-price increases have finally allowed Americans to regain the $16 trillion in wealth they lost to the Great Recession.

Household wealth amounted to $66.1 trillion at the end of 2012, the Federal Reserve said. That was $1.2 trillion more than three months earlier and 98 percent of the pre-recession peak.

Verizon spends $545M on network

Verizon said it invested more than $545 million in its Massachusetts telecom infrastructure last year.

Most banks pass Fed 'stress test'

Major U.S. banks have enough capital to withstand a severe economic downturn, the Federal Reserve said, with all but one major bank passing the regulator's annual "stress test."

All 18 participating lenders except for Ally Financial — government-owned after being rescued during the financial crisis — met the minimum hurdle of a 5 percent capital buffer.

Bank of America cleared that with 6.8 percent, while Boston's State Street Corp. notched 12.8 percent.

TODAY

• U.S. Labor Department releases the unemployment report for February.
• Veteran technology marketing executive Mark Fredrickson, left, has joined Boston marketing agency Conover Tuttle Pace as a managing director. He previously served as vice president of corporate communications and marketing strategy at EMC Corp. At CTP, Fredrickson leads the technology practice.

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Wall Street clips Staples on forecast

Investors reacted strongly to Staples' weaker-than-expected forecast and news that the office products retailer would invest the majority of its $150 million in cost-savings this year back into the business.

The Framingham-based chain's shares dropped by more than 7 percent to close at $12.14 yesterday.

"Clearly, the earnings guidance for fiscal year 2103 was disappointing," said Anthony Chukumba, a BB&T Capital Markets analyst. "Investors would have preferred to see more of that (savings) flow through to the bottom line."

Last fall, Staples unveiled a cost-cutting "reinvention" plan with expected savings of $250 million annually by early 2016. The plan included reducing U.S. and European store counts, more investment in online and mobile efforts, and expansion beyond traditional office supplies into break room supplies, copy and print, and technology.

Staples plans to reinvest this year's savings into "sharper" prices, information technology, expanded marketing, customer acquisition and employees.

"Our new vision is every product your business needs to succeed, and we're confident that we can accelerate growth in categories beyond office products," Staples chief Ron Sargent said, pointing to the company's progress in sales of supplies for facilities and break rooms, which grew more than 
$200 million last year for a $1.8 billion business. "We see big opportunities in areas like technology products, medical supplies, safety supplies, mail and ship, and office decor."

Staples also has developed a smaller, 12,000-square-foot store format with an updated Staples.com kiosk and "endless-aisle" shopping. The first ones will open this quarter. "We're confident that we can retain the vast majority of our sales in this new format while also driving sales of an expanded online offering," Sargent said.

Staples eliminated more than 1 million square feet of retail space last year and plans to cut an equal amount this year through 30 net store closings and 45 combined relocations and downsizings, half to the new store format.

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PRIM eyes prime properties

The state pension fund is set to go on a billion-dollar commercial real estate buying spree and experts say now is a great time to buy.

About 10 percent — or 
$5 billion — of the state's
$52 billion pension fund is currently invested in real estate, much of it in direct ownership of properties, including the fund's home at 84 State St. in downtown Boston.

State money managers recently decided to borrow against the pension fund's real estate portfolio, raising $1 billion at favorable terms, and hunt for more properties to purchase.

"Our appetite near-term for real estate has gone up. We have five real estate managers who are trying to identify real estate we can buy," Michael Trotsky, executive director and chief investment officer for the state pension fund, told the Herald. "We are looking mostly for 'core' real estate — the best buildings in the best locations, primarily in the United States, but we don't specifically target any city. It will be throughout the country."

David Begelfer, CEO of commercial real estate trade group NAIOP Massachusetts, said it's a superb time to buy for anyone who "does their homework."

"The market in Massachusetts, especially Eastern Massachusetts, has been extremely strong over the last couple of years and looks to be strong going forward," Begelfer said. "Many markets around the country are still recovering and so there are certainly some opportunities."

The pension fund already owns 87 commercial properties, plus several others through partnerships.

For example, in California, the fund owns the Market Street office and retail building in downtown San Francisco, a shopping center anchored by a Safeway in Mill Valley, and the Carmel Medical Office building in Rancho Bernardo.

The portfolio includes 2020 K St. in Washington, D.C. — the 11-story home to several Bingham McCutchen lawyers and the George Washington University Press — and the Sawgrass Lake Center, an office complex in Sunrise, Fla.

Last year, the pension fund returned 13.9 percent, much higher than its 8 percent target — and starting this year the state's target return has been increased to 8.5 percent. There are 522,800 members of the pension plan — 329,000 active and 199,000 retired, according to the state treasurer's office, which oversees the pension fund.

Trotsky said he expects the pension fund to invest the extra billion dollars within two years. The last time the pension fund went on a similar real estate buying spree in the 2000s, it netted $400 million extra.

"We're taking advantage of the low-interest rate environment and we expect it to generate $400 million in 'excess' profits over the next seven and a half years," he said. "It was considered very safe by outside investors. (The pension fund) is so big and so stable that it's not considered a big risk to issuers of this debt."

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DeLeo: Gov’s tax hike plan damaging

House Speaker Robert DeLeo will tell Hub business leaders today that working families and businesses shouldn't have to suffer "collateral damage" from Gov. Deval Patrick's plan to hike taxes by nearly $2 billion to pay for transportation and education.

"Sensitive to today's economic realities, I'm worried that the administration's proposal places too heavy a burden on working families and businesses struggling to survive," DeLeo says in a speech this morning to the Greater Boston Chamber of Commerce, according to his prepared remarks.

"We want to minimize the pressure on Massachusetts citizens as we find a way to meet our goals. If we are to pass a new revenue package, I believe it should be far more narrow in scope and of a significantly smaller size."

Patrick has proposed nearly $2 billion in new taxes to fund education and transportation projects and wants to hike income taxes; make regular increases in MBTA fares, RMV fees, highway tolls and the gas tax; and raise taxes on cigarettes, candy and soda, while lowering the state sales tax.

Some lawmakers prefer separating the $1 billion in transportation financing from the full state budget, with user fees instead of broad-based taxes.

In his chamber speech, DeLeo will also discuss funding for education, another Patrick priority.

"These areas cannot be sufficiently addressed without the injection of additional revenue into the system," DeLeo says. "While we agree we need to focus on these two areas, I do differ on the amount of new revenue that Massachusetts families and business should be asked to contribute."

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Longtime Mass. ice business on block

Longtime Mass. ice business on block

GLOUCESTER, Mass. — A company that's been supplying Gloucester fishermen with ice for decades is for sale as the fishing industry faces a brutal 2013.

The owner of Cape Pond Ice Co. tells the Gloucester Times that he has no choice as local fishermen absorb a 77 percent decrease in their cod catch this fishing year, which starts May 1.

Scott Memhard is asking $2 million for the property, which includes 180 feet of dockage where boats stop to ice up before heading out.

The business has diversified as the local fishing industry has declined. It increased T-shirt sales after a character wore a Cape Pond Ice shirt in the movie The Perfect Storm. He also marketed his ice for cocktails.

But he said the drastically declining fish catch is too damaging to his core business.

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Subaru recalls cars that can start on their own

DETROIT — Subaru of America is recalling more than 47,000 cars and SUVs with remote starters because the engines can start on their own.

The recall affects some Legacy and Outback cars from the 2010 to 2013 model years. Also covered are the Impreza from 2012 and 2013 and the XV Crosstrek from 2013.

Subaru says that if the key fob is dropped, it can malfunction and start the engine. The motor will run for up to 15 minutes, but could continue to start and stop until the car runs out of gas or the fob battery dies. If the cars are parked in a garage, there's a risk of carbon monoxide buildup.

The cars all have automatic or continuously variable transmissions. Subaru dealers will replace the fobs free of charge.

There was no mention of injuries related to the recall. Calls to Subaru early Thursday were not immediately returned.

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Dow record doesn't impress Wall Street workers

NEW YORK — What record?

There were no signs of a celebration on Wall Street after the Dow Jones industrial average closed at an all-time high Tuesday. Like on any other day, traders rushed out the doors of the New York Stock Exchange after the closing bell and down the stairs of subway stations. Nearby office workers did the same.

Maybe the memories of the financial meltdown are too fresh, or outlook for the economy is too uncertain. But the only indication that something historic had transpired was the six television news cameras that faced the stock exchange. Even that perplexed some Wall Street denizens.

"Is that what this is about?" said one trader, referring to the cameras and reporters as he darted across Wall Street. He said he didn't have time to give his name because he was rushing to get home.

The Dow rose 125.95 points Tuesday and closed at 14,253.77, topping the previous record set on Oct. 9, 2007 by almost 90 points. The blue-chip index has more than doubled since falling to a low of 6,547 in March 2009 during the financial crisis. It's another sign that the country is slowly healing after the worst recession since the 1930s.

Stocks have been rising thanks to stimulus from the Federal Reserve and record corporate profits. But the economic recovery has been slow and unemployment has remained high. And there's no telling where the stock market will go next.

It's no wonder that the reaction on Wall Street has been less than enthusiastic.

"It was relatively subdued," said Ted Weisberg, a trader who was on the stock exchange floor when the final bell rang Tuesday.

"When you experience a meltdown like we did, it leaves deep financial scars," said Weisberg, who has worked at the New York Stock Exchange for 44 years. "If you've been burned, you're not going to embrace the enthusiasm."

"There's also less people to get excited," he added. The rise of electronic trading means that fewer people are needed on the trading floor.

Markets in Asia did celebrate on Wall Street's coattails Wednesday, led by a jump in Japan's Nikkei 225 index of over 1 percent.

Popular after-work hangouts were half empty Tuesday night. Stone Street, a cobble stone road that's a five minute walk from Wall Street and home to several bars and restaurants, was quiet.

"It's a little busy, but mostly the same as usual," said Gina Parascandola, an event planner at Ulysses Folk House, a Stone Street pub where workers come in to grab a drink and a bite to eat.

Weisberg had no plans to celebrate the Dow's record either.

"I'm doing what I always do; go back to work," Weisberg said outside the stock exchange after the market closed. "It's just another day."

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Dow lifts Bay Staters’ hopes

Wall Street cheered as the Dow Jones industrial average soared to a record high yesterday, and Bay State residents and economic experts are hopeful the long-awaited recovery finally has taken hold.

"What we're seeing is a continuation of good news and the more we look around, the more green shoots we're seeing," Christine Armstrong, senior vice president at Morgan Stanley, told the Herald. "When we see this happen, it's bullish for the economy and bullish for the market longer-term."

Bay State residents saw positive signs in the record Dow, which rose 125.95 points to finish at 14,253.77, smashing its highest previous close of 14,164.53 on Oct. 9, 2007.

"If you look at a stellar day, it's a good sign, but the real sign will be when the movers and shakers start hiring," Charlie Duquette of Stoughton said yesterday at South Station. "The market usually precedes reality. In the spring, it's going to thaw, and I think you're going to see a hiring frenzy."

Liz Isaac of North Attleboro said the Dow's performance shows that the federal government sequester "isn't going to cause immediate apocalypse."

"I'm in the middle of a job search, and I see lots of openings and hear lots of positive talk," she said.

But Armstrong warned that the Dow would most likely pull back over the next few days.

"We still have problems — look at how many Americans are still out of work and losing homes," she said. "It's not a party for everybody. It's a party for a lot of people and they're hopefully pulling the rest with them."

Robert Nakosteen, a professor of economics at the University of Massachusetts Amherst's Isenberg School of Management, called the Dow's performance the culmination of a trend that has been going on ever since interest rates were pushed to near zero by the Federal Reserve.

"People who have extra money and want some return invest in stocks," he said.

Although unemployment is still high, businesses have "tremendous" profits, making the stock market very attractive, he added.

"The sequester aside, the economy's really starting to firm up," Nakosteen said. "By no means is it in great shape, but the fact that the stock market is doing well reflects that there's more optimism."

Andre Mayer, senior vice president for research at Associated Industries of Massachusetts, said "the chances of a meltdown seem to be less."

"The economy, though growing very slowly, is much more stable than it was," he said.

All eyes will be on Wall Street today to see whether the Dow's index of 30 blue-chip stocks can hold its record gains — and whether the economy as a whole gets a lift.

"It seems to me (the economy) is doing better," said Carolyn Hoffman of Greenfield. "I have more faith it's headed in the right direction."

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Samsung invests $112 million in Japan's Sharp

SEOUL, South Korea — Samsung Electronics Co. said Wednesday it will invest 10.4 billion yen ($111.5 million) in Sharp Corp. to secure a supply of large-size LCD panels.

The agreement gives Samsung a 3 percent stake in Osaka-based Sharp and a supply of large-size LCD panels for televisions. Samsung said in a statement that the investment will help strengthen Sharp's LCD panel business. The South Korean company known for its Galaxy smartphones and tablets said it will not be involved in Sharp's management.

The alliance is a boost for the troubled Japanese company that has been seeking to raise capital as part of its turnaround plans. Sharp shares jumped 14.1 percent in Tokyo trading.

The maker of Igzo display panels and Aquos TVs has struggled to stay afloat as competition from South Korean and Chinese TV makers squeezed Japanese manufacturers and their ability to make the big capital investments needed in the hyper competitive LCD industry.

Sharp has been in talks with Taiwan-based Hon Hai Precision Industry Co., also known as Foxconn, to raise capital but no deal has been reached. Sharp announced in December a 9.9 billion yen investment from Qualcomm Inc. to jointly develop new display technology.

Sharp has LCD panel factories in Kameyama and Sakai in Japan and produces small- and medium-sized panels for smartphones as well as large panels for TVs.

The deal with Samsung helps Sharp ramp up its display panel production. Sharp's panel clients include Samsung's rival Apple Inc. and Samsung, though the South Korea company gets most of its panel supply from its affiliate Samsung Display Co.

Sharp forecasts a record 450 billion yen ($5 billion) loss for its business year through March and has struggled to cut costs and reshape its business, partly because it has invested in expensive plants in Japan that make panels for which prices have fallen sharply overseas. The plants embody Sharp's prized technology, but they also make the company hostage to the yen's swings.

The agreement is the latest investment in Japanese firms by Samsung, which sits on a stockpile of cash and has strong overseas buying power because of the won's rise. In January, it acquired a 5 percent stake in Wacom Co., a Japanese firm with digital pen technology.

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Markets keep rising after Dow hits record high

LONDON — The Dow's new all-time high and better economic data from the United States propelled world markets Wednesday, with European stocks hitting a four-year high.

Investors are cheered by major central banks' commitments to keep supporting growth in the world biggest economies — the U.S., China, the 17-country eurozone, Japan and Britain.

That has helped them look past a budget impasse in Washington. Automatic government budget cuts took effect last week after President Barack Obama and Congress failed to reach a budget deal. The $85 billion in cuts are expected to hurt U.S. economic growth, but for now investors seem happy to buy further into the market rally.

European shares added to gains reaped a day earlier, when the Dow posted a new record. Britain's FTSE 100 rose 0.1 percent to 6,439.54 while Germany's DAX advanced 1 percent to 7,950.84. France's CAC-40 added 0.3 percent to 3,798.65.

A broader measure of European stocks, the Stoxx Europe 600, rose to its highest level since June 2008.

Wall Street also showed no signs of slowing, with Dow Jones industrial futures rising 0.4 percent to 14,284 and the broader S&P 500 futures up 0.4 percent to 1,542.50.

Japan's benchmark index reached a multi-year closing high, capping a day of positive trade in Asia. The Nikkei 225 jumped 2.1 percent to close at 11,932.27, the highest finish since September 2008.

Hong Kong's Hang Seng added 1 percent to 22,777.84. South Korea's Kospi rose 0.2 percent to 2,020.74. Australia's S&P/ASX 200 advanced 0.8 percent to 5,116.80. Benchmarks in Singapore, Taiwan, Indonesia and mainland China rose.

Ric Spooner, chief market analyst at CMC Markets, said the new highs reached on Wall Street provided a psychological boost to investors but that such gains can go into reverse pretty quickly.

"From the big picture point of view, there is a lot of risk in either direction for the stock market at the moment," he said. "But we could quite easily continue rising, given how low interest rates are."

Federal Reserve chairman Ben Bernanke has recently suggested that the central bank would continue its campaign of massive bond-buying, known as "quantitative easing," to support the world's biggest economy. The issuance of bonds has pushed their prices down, steering investors toward stocks.

"The lesson is clear. Don't bet on Capitol Hill. Bet on Fed Chairman Ben Bernanke instead. To be sure, it was Bernanke's reassurance, as last week's congressional testimonies on monetary policy, to keep QE3 on its present course that turned a worried stock market into a record high," said analysts at DBS Bank Ltd. in Singapore.

Meanwhile, Japan's central bank is expected to sharply loosen its monetary policy to get the economy growth after two decades of stagnation. Chinese authorities have committed themselves to their economic growth target, while the European Central Bank is expected to leave interest rates at record lows for the foreseeable future.

In commodity markets, the benchmark oil contract for April delivery was down 26 cents to $90.56 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 70 cents on Tuesday, hours after the death of Venezuelan President Hugo Chavez, whose country sits on the world's second-largest oil reserves, after Saudi Arabia.

In currencies, the euro shed 0.2 percent against the dollar, to $1.3030, while the dollar rose 0.1 percent against the Japanese yen, to 93.42 yen.

___

Pamela Sampson in Bangkok contributed to this report.

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Former GM executive tapped for Toyota board

TOKYO — Toyota has tapped a former executive at U.S. rival General Motors to join its board, the first time in the Japanese automaker's 76-year history it is appointing directors from outside the company.

The appointment of Mark Hogan, effective April 1, underlines efforts at Toyota Motor Corp. to become more internationally-minded, transparent and nimble in regional markets as it recovers from difficult years, including the massive recall fiasco in the U.S.

Under the changes announced Wednesday by President Akio Toyoda, Toyota will set up a new division to oversee North American, European and Japanese markets and another for emerging markets.

The world's biggest automaker also promoted four non-Japanese managers to oversee regional businesses, including James Lentz, an American who already leads Toyota Motor Sales in the U.S. He will head the North American region.

Like other conservative Japanese companies, Toyota has been far more insular than its Western counterparts, and had been closed in the past to the idea of board members from outside company ranks.

The changes reflect soul-searching at the company following the massive global recalls over sticky gas pedals, faulty floor mats, problem breaks and other defects that spanned several years from 2009, and affected more than 14 million vehicles — some models being recalled repeatedly.

The recalls tarnished Toyota's reputation for quality and raised questions about its ability to respond to problems that crop up in its rapidly expanding global empire, and to reassure international authorities and customers of its trustworthiness and transparency.

Besides Hogan, two Japanese, from the insurance and securities industries, were picked as outside board members. They are Ikuo Uno, an executive advisor at Nippon Life Insurance Company and Haruhiko Kato, president of the Japan Securities Depository Center.

Hogan, an independent consultant and former GM group vice president, has been Toyoda's friend since they worked together more than a decade ago at NUMMI, or New United Motor Manufacturing, a California auto plant jointly run by Toyota and GM. Hogan has also previously advised Toyota.

The board appointments require approval from shareholders at a meeting in June.

Toyota has had a foreigner on its board just once in the past, in 2007, with Jim Press, an American who had headed Toyota's North American operations at a time when fears were growing about a possible American backlash over Toyota's stupendous growth. But Press left shortly afterward for a job with Chrysler.

Toyoda acknowledged that he has learned "many lessons" since becoming Toyota president in 2009, including the risks of rapid growth.

"Rapid growth can also mean rapid descent, creating havoc for many people," he said.

Toyoda referred to the quality woes, as well as the other recent crises such as the 2011 earthquake and tsunami in northeastern Japan and the flooding in Thailand that followed. Both disasters destroyed key suppliers and hobbled Toyota's production.

But he promised Toyota will be more responsive in each region, while staying competitive and quick, even as it keeps growing as a global manufacturer, now employing 320,000 people.

"The larger Toyota becomes, the more difficult it becomes to create the mood for each worker to feel he or she plays a direct role in supporting Toyota," Toyoda said.

"The objective of the changes being announced today is to build an organization where people can take ownership of their work as we enter a new phase of growth in vehicle sales."

Toyota was No. 1 in global vehicles sales last year, dethroning General Motors, which had been the top-selling automaker for more than seven decades before losing the title to Toyota in 2008. But GM retook the sales crown in 2011, when Toyota's production was hurt by the Japanese disaster.

Toyoda, the grandson of the automaker's founder, stressed that the changes he hopes to spearhead herald a return to Toyota's roots.

The Toyota Way, a production method that empowers each worker for quality control, also encourages each employee to be innovative and independent. That spirit of valuing the people on the ground needed to be revived for Toyota's future, he said.

Among other changes outlined by Toyota:

— A new division called "Unit Center" oversees the operations related to engines, transmissions and other key auto components, including technology, production planning, and manufacturing.

— Lexus International, Toyota's luxury-vehicle division, which already exists as a relatively autonomous group, will be beefed up further, to become a premium brand overseen directly by Toyoda.

— Former President and current Chairman Fujio Cho will become honorary chairman and leave the board, while Takeshi Uchiyamada, a board member and engineer known as "the father of the Prius," Toyota's prized hybrid model, will become chairman.

— The other key non-Japanese promotions include Steve St. Angelo, an American overseeing North American production who will lead Latin American operations and South African Johan van Zyl. He has worked for Toyota in the Middle East and Africa and will lead the business in the African region.

___

Follow Yuri Kageyama on Twitter at twitter.com/yurikageyama

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Firm makes it a Snap to pay around the world

Truly global commerce where merchants can take payment in almost any major currency is getting a boost from an Israeli firm that just opened offices in Waltham.

BlueSnap powers transactions in 145 countries and 28 currencies, said Ralph Dangelmaier, who took over as CEO six months ago.

"We're pretty confident when merchants use us, we increase their business 20 to 40 percent," Dangelmaier said. "It's because we offer lots of payment types, so it's easy to pay, and in their own language."

BlueSnap, whose main competitor is eBay-owned PayPal, also allows merchants to run promotions and it offers subscription billing on a monthly, quarterly or annual basis, he said. They pay between 
2 percent and 8 percent of each transaction, depending on what they're selling, the type of payment and where it's coming from.

Founded in Israel in 2002 under the name Plimus, BlueSnap has had offices in Silicon Valley since 2006, and it's expanding in all three locations, Dangelmaier said.

In 2011, Great Hill Partners of Boston bought controlling interest of the company for $115 million.

"It seemed like a pretty decent bet that more businesses were going to be selling software content and subscription services online over the next five to 10 years," said Matt Vettel, managing partner at Great Hill Partners.

Today, BlueSnap has about 120 employees and about 5,000 clients worldwide, most of them outside the United States, Dangelmaier said. PayPal is one of its competitors, but doesn't customize screens for merchants, allow promotions or subscriptions, or accept as many payment types, he said.

"We think we've built a better mousetrap," Dangelmaier said.

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Pact Stops grocer’s worker woes

Stop & Shop appears to have avoided a potential lockout or strike by 40,000 workers after reaching a tentative contract deal with their union locals.

The agreement with United Food and Commercial Workers International Union, reached around 
4 a.m. yesterday, is subject to legal review before ratification meetings are scheduled with union members in Massachusetts, Connecticut and Rhode Island.

"Stop & Shop is pleased to have reached tentative agreements with each of the five New England UFCW local unions," said Suzi 
Robinson, spokeswoman for the Quincy-based supermarket chain.

Stop & Shop had set up hiring centers in January to recruit temporary replacement workers in case talks reached an impasse.

"We have not yet had to use the temporary workers," Robinson said. "No union has initiated any work stoppage during (current) negotiations."

Union officials did not return calls for comment.

The workers' contract originally was scheduled to expire at midnight on 
sFeb. 23, but was extended to midnight Sunday as negotiations continued.

Talks apparently got contentious over the weekend, based on an update posted on the union's website just after midnight on Sunday.

"Stress is very high, and emotions are playing a greater role as the exchanges of proposals creates more questions than solutions," union presidents said in the update. "We are quite a bit apart on wages, and we are significantly apart on a multitude of heath-care issues."

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State picks Pike's peak

Hub developers Samuels & Associates and Weiner Ventures got a green light from the state to build a $360 million residential, hotel and retail project over the Mass Pike — big plans in the Back Bay that could get even bigger.

The real estate firms won a lengthy competition for two key air-rights parcels with twin developments that promise to raise cash for taxpayers and transform the intersection of Boylston Street and Massachusetts Avenue.

"It really fills in part of the Back Bay that really, simply put, needs to be filled in," developer Adam Weiner said yesterday after the Massachusetts Department of Transportation announced its selection. "It really needs more energy and greater vibrancy."

With the state-owned sites all but secured, the Samuels/Weiner team will pursue an adjacent air-rights parcel owned by insurance giant Prudential Financial to extend the development farther down the block. Prudential had teamed with losing bidder Chiafaro Co. on a 29-story office tower on its parcel and the state-owned Parcel 15.

Meanwhile, according to sources familiar with the situation, Samuels/Weiner are working on a deal to buy a Dalton Street parking garage, across from the Hynes Convention Center, where the development could expand even more.

Onetime air-rights bidder Carpenter & Co. of Cambridge dropped out of the running last summer after failing to make a deal with garage owner Pilgrim Parking. Carpenter had planned a 16-story office tower on the site, next to a 200-room hotel.

Weiner declined comment about a garage deal. He noted a Prudential executive said during a community meeting that the company would "act accordingly" with whichever developer is designated.

"We look forward to having conversations with them," Weiner said. "The project doesn't depend on it, but obviously it seems to be a natural (extension)."

A Prudential spokesman declined comment. Ted 
Oatis, co-founder of the Chiofaro Co., said the developer "would welcome the opportunity to work contemporaneously" with the Samuels/Weiner team.

MassDOT is finalizing a 99-year lease with initial payments of $18.5 million from the developers. State transportation chief Richard Davey said the Samuels/Weiner proposal "provides the best overall value and long-term benefit to the city of Boston."

The project, subject to city permitting, calls for a 32-story hotel and residential tower across Parcel 15 and a St. Cecilia Street parcel the developers bought from the Archdiocese of Boston for nearly $14 million in 2008 — with the development in mind all along.

On Parcel 12, an L-shaped structure would include a mid-rise residential building along Boylston and a two-story retail building over the Pike along Mass. Ave., capitalizing on nearby Newbury Street's posh shopping district.

The two sites total 230 residential units, a 270-room hotel and 50,000 square feet of shops and restaurants. It was the consensus favorite of a powerful Back Bay citizens advisory committee that reviewed all of the plans.

"Covering up the Mass Pike will knit the Back Bay together," said Meg Mainzer-Cohen, president of the Back Bay Association, who served on the panel. "We think the hotel is going to be very exciting. This is the hottest hotel market in Boston, and right next to (the Hynes) is an ideal site."

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India rejects Bayer plea against cheap cancer drug

NEW DELHI — India's patent appeals office has rejected Bayer AG's plea to stop the production of a cheaper generic version of a patented cancer drug in a ruling that health groups say is an important precedent for getting inexpensive lifesaving medicines to the poor.

Last year, India's patent office allowed local drug manufacturer Natco Pharma Ltd. to produce a generic version of Bayer's kidney and liver cancer drug Nexavar on the grounds it would make the drug available to the public at a reasonably affordable price. It was the first use of compulsory licensing under Indian patent laws passed in 2005.

The Intellectual Property Appellate Board rejected the German drug maker's appeal of the 2012 ruling on Monday. It also ruled that under the license Natco must pay 7 percent in royalties on net sales to Bayer.

Bayer sells a one month supply of the drug for about $5,600. Natco's version would cost Indian patients $175 a month, less than 1/30th as much.

Western pharmaceutical companies have been pushing for stronger patent protections in India to regulate the country's $26 billion generics industry, which they say frequently flouts intellectual property rights. However, health activists and aid groups counter that Indian generics are a lifesaver for patients in poor countries who cannot afford Western prices to treat diseases such as cancer, malaria and HIV.

Bayer said Tuesday it "strongly" disagreed with the appeal panel's decision and would pursue the case in the high court in India's commercial capital Mumbai.

"Bayer is committed to protecting its patents for Nexavar and will rigorously continue to defend our intellectual property rights within the Indian legal system," the company said in a statement.

It said one of the main barriers to access to medicines in developing countries such as India is the "lack of adequate healthcare services and infrastructure ensuring that drugs will effectively bring treatment to those who most need it."

Health groups welcomed the panel's ruling saying it would check the abuse of patents and open up access to affordable versions of patented medicines.

"The decision means that the way has been paved for compulsory licenses to be issued on other drugs, now patented in India and priced out of affordable reach, to be produced by generic companies and sold at a fraction of the price," said Leena Menghaney of medical humanitarian aid organization Medecins Sans Frontieres.

The decision might encourage Indian drug makers to explore the compulsory license route to manufacturing drugs that are critical in the treatment of HIV patients.

"We have started to switch people we treat for HIV who develop drug resistance on to newer medicines. But these are expensive, which means not everyone who needs the medicine can afford it," said Menghaney.

She said a World Health Organization-recommended drug such as Raltegravir costs nearly $1,800 per person per year, an unaffordable sum for most HIV patients in India.

"We are waiting to see if drug manufacturers will take up the challenge," Menghaney said.

Under World Trade Organization rules, governments have the right to issue compulsory licenses to overcome barriers to access to cheaper versions of a patented drug without the consent of the company that invented the drug.

Several Western pharmaceutical giants say India's 2005 Patent Act fails to guarantee the rights of investors who finance drug research and development.

Bayer said the patent panel's order weakens the international patent system and endangers pharmaceutical research.

"The limited period of marketing exclusivity made possible by patents ensures that the costs associated with the research and development of innovative medicines can be recovered," the company said.

Meanwhile, Swiss drug maker Novartis AG is awaiting a decision by India's Supreme Court on the rejection of patents for its cancer drug Gleevec. That case revolves around a different legal provision allowing India to block "evergreening" — extensions of patents based on minor changes to existing treatments.

The Supreme Court's ruling on the case is expected soon.

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Martha Stewart to testify in trial over her brand

NEW YORK — Eight years after Martha Stewart was released from prison for lying about a stock trade, the home diva is now facing another legal mess that may not be easy to clean up.

Stewart, 71, is scheduled to take the stand in New York State Supreme Court Tuesday. She is at the center of a bitter legal battle between two of the nation's largest retailers — Macy's Inc. and J.C. Penney Co.

Macy's sued the media and merchandising company Stewart founded for breaching an exclusive contract when she signed a deal with Penney in December 2011 to open shops at most of its stores this spring.

Macy's, which has sold Martha Stewart products including towels and pots since 2007, is trying to block Penney from selling those products.

The trial is clearly more than a vanilla contract dispute. It's a courtroom drama that's unfolding about disloyalty and greed.

Testimony has portrayed Stewart as someone who turned her back on her good friend and Macy's CEO Terry Lundgren so she could enrich her company.

Such allegations only reinforce her reputation as a ruthless businesswoman and could hurt her brand and her image, brand experts say. The allegations come when the business is struggling to fatten merchandising revenue as it tries to offset declines in its broadcast and publishing divisions.

"On the one hand, you have two retailers fighting over the brand. That could breathe life into the brand," said Michael Stone, president of The Beanstalk Group, a global brand licensing agency. The danger? "Consumers may get weary of her, and they're going to believe she only thinks of herself. She doesn't care about her friends."

He said Stewart needs to regain sympathy with consumers when she takes the stand Tuesday — or else they could start to look elsewhere.

Martha Stewart Living Omnimedia Inc. just finished its fifth straight year of losses and has suffered a string of annual revenue declines. In the latest year ended Dec. 31, the company had revenue of $197.6 million, down nearly 11 percent from the previous year's $221.4 million.

Losses widened to $56 million from $15.5 million the year before.

The company's shares are now trading around $2.50, down more than 90 percent from $36 in February 2005. That was when Martha Stewart was finishing up her five-month prison sentence and investors pushed up the stock.

Martha Stewart Living Omnimedia's publishing and TV business had taken a big hit when Stewart was convicted in March 2004 of lying to prosecutors about a stock sale. After Stewart's release, business began to recover as advertisers who had fled returned.

But in the past few years, Martha Stewart Living has been grappling with a consumer shift to the Web and mobile devices to get the latest recipes and other food tips.

Last November, the company announced that it would downsize its magazines and cut publishing jobs to focus on online video and other digital content.

Martha Stewart Living has been trying to bolster its merchandising business, which totaled $57.5 million in the latest year, nearly 30 percent of the company's revenue. The company has a collection of paints and cabinets sold at Home Depot and teamed up with pet supply chain Petco for a line of bowls, collars, toys and clothes for pets.

Still, Beanstalk's Stone said the big opportunities for Martha Stewart are in the home category as the housing recovery gains momentum and consumers look to plow money into their homes.

That's why the stakes are so high for Macy's and Penney.

Macy's Lundgren said his company had built the Martha Stewart brand to be the biggest in the home business. That's a big feat considering the brand was reeling over Stewart's personal legal issues and had been cheapened by its partnership with Kmart when it signed the Macy's deal in 2006. Kmart's licensing deal ended in 2009.

Sales for the Martha Stewart brand at Macy's rose 8 percent last year, double the sales increase for the entire company. Lundgren said that while home items don't sell as quickly, they bring different types of shoppers into stores.

"I need the Martha Stewart business to be exclusive," Lundgren testified last week. "I don't have a substitute."

In the last few days of the trial, it became clear how much Penney's CEO Ron Johnson was out to woo Stewart, even initially proposing a deal that would include a personal licensing fee for Stewart herself equal to 2 percent of revenue.

Penney ended up investing $38.5 million for a nearly 17 percent stake in Martha Stewart Living. The media company is expected to receive more than $200 million over the 10-year deal.

Penney, based in Plano, Texas, is in the middle of a turnaround plan that's faltering. The company has reported big losses and sales declines for four straight quarters since it started a strategy to get rid of most of its sales in favor of everyday low prices last year.

Penney, which started to roll out mini-shops tied to popular brands in its stores last fall, has been counting on a reinvented home area to attract shoppers. It had planned to use the Martha Stewart brand as the anchor.

Last July, Macy's won a preliminary injunction against Martha Stewart Living that would prevent it from selling housewares and other exclusive products at Penney. In August, the judge granted permission for Penney to open Martha Stewart shops as long as the items under the exclusive contract with Macy's are not sold in them.

Penney said it plans to sell products that are part of Macy's exclusive agreement in May. The goods will be branded "JCP Everyday," a new brand reserved for the Martha Stewart's merchandise.

Penney also plans to sell products like curtains and stationery that are not a part of the exclusive Macy's contract under the label "Martha."

As for Lundgren and Stewart, he considers their friendship over. During the testimony last week, Lundgren described how he hung up on Stewart after she informed him on Dec. 6, 2011, that she brokered a deal with Penney. She said an expanded partnership would only be good for Macy's. He hasn't spoken to her since. He even appeared choked up at times.

"I was completely shocked and blown away," he testified last week. "It was so far from anything I could imagine."

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Spending cuts seem here to stay

WASHINGTON — The spending cuts are here to stay if you believe the public posturing Sunday.

The Senate's Republican leader Mitch McConnell called them modest. House Speaker John Boehner isn't sure the cuts will hurt the economy. The White House's top economic adviser, Gene Sperling, said the pain isn't that bad right now.

So after months of dire warnings, Washington didn't implode, government didn't shut down and the $85 billion budget trigger didn't spell doom. And no one has yet crafted a politically viable way to roll back those cuts.

"This modest reduction of 2.4 percent in spending over the next six months is a little more than the average American experienced just two months ago, when their own pay went down when the payroll tax holiday expired," McConnell said.

"I don't know whether it's going to hurt the economy or not," Boehner said. "I don't think anyone quite understands how the sequester is really going to work."

And Sperling, making the rounds on the Sunday news shows, added: "On Day One, it will not be as harmful as it will be over time."

Both parties cast blame on the other for the automatic, across-the-board spending cuts but gave little guidance on what to expect in the coming weeks. Republicans and Democrats pledged to retroactively undo the cuts but signaled no hints as to how that process would start to take shape. Republicans insisted there would be no new taxes and Democrats refused to talk about any bargain without them.

"That's not going to work," said Sen. Kelly Ayotte, R-N.H. "If we're going to increase revenue again, it's got to go to the debt with real entitlement reform and real tax reform when you actually lower rates. ... I'm not going to agree to any more tax increases that are going to go to increase more government."

Sen. Lindsey Graham, R-S.C., said any tax increases were unacceptable.

"I'm not going to do any more small deals. I'm not going to raise taxes to fix sequestration. We don't need to raise taxes to fund the government," Graham said.

All of this comes ahead of a new, March 27 deadline that could spell a government shutdown and a debt-ceiling clash coming in May.

Boehner said his chamber would move this week to pass a measure to keep government open through Sept. 30. McConnell said a government shutdown was unlikely to come from his side of Capitol Hill. The White House said it would dodge the shutdown and roll back the cuts, which hit domestic and defense spending in equal share.

"We will still be committed to trying to find Republicans and Democrats that will work on a bipartisan compromise to get rid of the sequester," Sperling said.

Senate Democrats and Senate Republicans last week put forward alternatives that would have avoided the cuts, but each side voted down the others' proposals. The House Democrats proposed an alternative but the House Republicans did not let them vote on it.

House Republicans twice passed alternatives last year.

Obama has phoned lawmakers but it isn't clear to what end; the White House refused Sunday to release the names of lawmakers Obama phoned. Boehner and McConnell said they had a productive meeting with Obama on Friday, but it didn't yield a deal.

"Well, no one can think that that's been a success for the president," said Mitt Romney, Obama's unsuccessful rival in November's election. "He didn't think the sequester would happen. It is happening."

Obama and the Republicans have been fighting over federal spending since the opposition party regained control of the House of Representatives in the 2010 midterm elections. The budget cuts were designed in 2011 to be so ruthless that both sides would be forced to find a better deal, but they haven't despite two years to find a compromise.

The $85 billion in cuts apply to the remainder of the 2013 fiscal year, which ends Sept. 30. But without a deal they will continue slashing government spending by about $1 trillion more over a 10-year period.

McConnell spoke to CNN's "State of the Union." Boehner was interviewed on NBC's "Meet the Press." Sperling appeared on ABC's "This Week," NBC and CNN. Ayotte appeared on ABC. Graham spoke with CBS' "Face the Nation." Romney was a guest on "Fox News Sunday."

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Mustering a new tenant for Navy Yard landmark

The Muster House — an unusual, octagonal building that served as a worker assembly point at the Charlestown Navy Yard in the 1800s — will have a new leasehold owner for the first time in more than 15 years.

The owner of a building consulting firm in Cambridge is finalizing a deal and may relocate his business to the 31 Fifth St. property, which has been owned by the Boston Redevelopment Authority since a 1970s handover by the federal government.

"From a community point of view, it's always good to see an active user in that building," said Mark Rosenshein of the Charlestown Neighborhood Council. "It's a very small and unique space, so it takes a very unique user to make it work."

Though tiny at less than 2,900 square feet and well off the Hub office market's beaten path, the Muster House drew the likes of dot-com darling Jeff Taylor. The Monster founder picked the historic pad for his Eons startup, working solo there for the first few weeks.

"An entrepreneur starts in a very lonely place," Taylor told Bloomberg News in 2006. "It's when you think you have a great idea and everyone around you thinks you're crazy, and you act on it."

Built between 1852 and 1854, the four-story brick building is surrounded by a porch and topped by a clock tower. Shipyard workers mustered daily at the sign, receiving assignments and pay. The landmark is down the street from the USS Constitution's berth.

The next tenant may be Building Enclosure Associates, whose owner, Michael Velji, is close to finalizing a purchase of the lease from the Royalston Trust.

Velji was not available for comment, but an executive at the firm, Ed Mannix, said a deal may be done later this month.

The Royalston Trust was set up by the late Werner Bundschuh, a filmmaker and local real estate developer who acquired the Muster House lease at a foreclosure auction in 1997. At the time, the trust assumed a 65-year lease with the BRA, paying about $4,300 a year and taking responsibility for renovations and maintenance.

"We actually had quite a bit of interest," said Nancy Kueny, a broker at Gibson Sotheby's International Realty handling the lease sale for the trust. "It's probably one of the most interesting buildings in the Navy Yard."

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The Ticker

What's up, online doc?

Rite Aid has expanded an online doctor service for its drugstore customers that is limited to virtual visits, but cheaper than a traditional primary care appointment.

The company, the nation's third-largest drugstore operator with 4,600 U.S. stores, said its NowClinic Online Care program is available at 58 locations in four cities: Baltimore, Boston, Philadelphia and Pittsburgh. Its rivals, Walgreen and CVS, also run in-store clinic programs. Walgreen operates more than 370 Take Care clinics, while CVS runs more than 600 MinuteClinics.

Rite Aid's service connects drugstore customers with doctors for a video or phone consultation about a range of ailments like allergies, bronchitis, rashes, the flu or sinus infections. Rite Aid officials say the concept aims to improve access to health care.

TODAY

• At a community meeting in South Boston, developers discuss plans to demolish St. Augustine's Church and build a residential complex.
• Men's Wearhouse reports quarterly financial earnings.

TOMORROW

• The Harvard Allston Task Force meets at the Honan-Allston library branch.
• The Institute for Supply Management Index releases its service sector index for February.

WEDNESDAY

• Framingham office supplier Staples reports quarterly financial results.
• The Federal Reserve releases the "Beige Book" report on regional economic conditions.

THURSDAY

• The Greater Boston Chamber of Commerce hosts a government affairs forum featuring House Speaker Robert DeLeo, at Boston Park Plaza.
• Massachusetts jobs figures for January and revised 2012 unemployment rate, labor force data and jobs estimates are released.
• The Federal Reserve releases consumer credit data for January.

FRIDAY

• U.S. Labor Department releases the unemployment report for February.
• Rockland Trust has appointed Brian Slater to the bank's commercial lending team as vice president. Prior to joining the bank, Slater served as senior vice president and team leader at People's United Bank.
• Blueprint Medicines of Cambridge has added Dr. David Schenkein, chief executive officer of Agios Pharmaceuticals, to its board of directors.

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Media Google-y eyed over glasses idea

If you've paid any attention to technology-related news recently, you might think that by the end of the year we'll all be like Tom Cruise in "Minority Report," sporting retina-scanning glasses with a gestural interface in the form of Google's Project Glass.

But what's lost in all the media fawning is that Google actually has produced something between a really cool virtual tour-guide and a hands-free smartphone. Not quite the augmented reality game-changer that is being portrayed. For now.

Google, or specifically co-founder Sergey Brin, has done a masterful job of marketing a fantasy, tapping into our collective craving for the next game-changing device. The company has not only driven its stock price to an all-time high, but also crowd-sourced the vision for whatever eventually becomes of Project Glass.

But the hype may have gotten out of hand recently. A few days ago, Brin was actually downplaying expectations: "It's by no means a done deal yet," he said, adding that we shouldn't trust purported prototypes that show up on eBay.

The interesting psychology of Google's strategy aside, the fact is that some sort of glasses will become available to some segment of consumers soon — for about $1,500. The few who have tested this device report that in a controlled environment for a short period of time under certain circumstances, Google's glasses can take videos and photos, forecast the weather, receive email and relay directions — provided there's a cellphone to connect with.

Though I'm as psyched as anyone to get my hands on these things, whatever they are, I predict that Google's glasses will compete directly with another product that requires a smartphone to work, and that it won't win. Apple's rumored iWatch will wear more discreetly, and it will be cheaper, too.

I predict the glasses will have the battery life of a first-generation smartphone and will be similar to Segways — the province of mall cops, group tours and the eccentric rich, but another novelty cast aside by the mainstream.

Even if Google fully achieves its vision, there's still the giant impediment of getting people comfortable with the idea of looking and sounding silly, talking to oversized bifocals as they walk.

But don't misunderstand: I'd love to get a pair. So Google ... if you're reading this ... can I expect my review glasses soon?

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Evernote hacked: 50 million passwords reset

LONDON — Online note-taking service Evernote Corp. has been hacked and is resetting all its 50 million users' passwords as a precaution.

The Redwood City, California-based company said in a post published late Saturday that an attacker had been able to access sensitive customer information and that every user would have their account reset "in an abundance of caution." In a follow-up email sent Sunday, the company said it believed the attack "follows a similar pattern of the many high profile attacks on other internet-based companies that have taken place over the last several weeks" — an apparent reference of recent breaches at Facebook Inc., Twitter Inc., and Apple Inc.

However the company said the attack did not appear to be linked to Java, a commonly used computer programming language whose weaknesses have been used as springboards for other recent hacks.

Evernote said the attack, which it described as "sophisticated," was able to compromise an unspecified number of customers' encrypted passwords. Decoding such passwords can be difficult but possible.

The company said it has seen no evidence that any customer data had been tampered with or that any payment information had been compromised.

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Boston’s Pongr gains Sightec

A new technology deal inked with Israeli startup Sightec has Hub-based 
Pongr thinking about the big picture.

The mobile photo marketing company said its "significant" acquisition of Sightec's super-resolution software will help Pongr pinpoint harder-to-find brands and products in photos consumers take across social networks, thereby offering advertisers more marketing opportunities.

"We think we've gotten really good at how to do direct response photo marketing for brands. This is about scaling it up and doing it through these other networks," Pongr CEO Jamie Thompson, 32, told the Herald. "We needed some robust technology in order to do that."

Thompson said Sightec's technology can improve image quality 10 times over typical image enhancement results, and detect people and objects within pictures regardless of whether they are in the foreground or background.

"If it's a birthday party, and you take a picture of your wife or loved one celebrating their birthday and there happens to be Mountain Dew on the table, we want to know that Mountain Dew is part of that birthday celebration," he said. "It's very, very hard to analyze billions and billions of photos looking for items, or objects, or things, or people that might be of interest to advertisers because consumers may not necessarily be tagging them."

Founded in 2008, Pongr asks consumers to use their mobile phone cameras to snap shots of outdoor billboards, bus stop advertisements, products and magazine pages in return for rewards that are messaged back to their phones. The company has previously done major promotional campaigns with brands like Pepsi, Mountain Dew and Frito-Lay.

The company will keep Sightec's scientific team in Tel Aviv for now, with plans to add more scientists and engineers in the Israeli city as part of the "all-stock deal," Thompson said.

Thompson added that Sightec's technology, when applied to the Pongr platform, has greater ability to match mobile and desktop ads with the contextual relevance of photos consumers take with their mobile devices and share across networks such as Facebook, Twitter, Instagram, Pinterest and Tumblr.

"As we stand now on the tip of the iceberg of a new era of user-generated visual content, we think visual content needs to be matched up better to how the Internet is monetized," he said. "If advertisers can't take advantage of this content, then the money they spend on ads is not as relevant as it could be."

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Thousands march in Portugal to protest austerity

LISBON, Portugal — Many thousands of demonstrators held marches in more than 20 cities in Portugal on Saturday to protest against government-imposed austerity measures aimed at lifting the ailing country out of recession.

Tens of thousands of people filled a Lisbon boulevard leading to the Finance Ministry carrying placards saying "Screw the troika, we want our lives back." The troika is a reference to the European Commission, the International Monetary Fund and the European Central Bank, the lenders behind the country's financial bailout.

Many protesters were singing a 40-year-old song linked to a 1974 popular uprising known as the Carnation Revolution. Some waved handkerchiefs in a symbolic gesture, saying goodbye to the government.

"If the government pays attention to what is happening and understands that the people are against them, they should get out," said Serafin Lobato, 65. "If not, this won't stop."

Portugal is expected to endure a third straight year of recession in 2013, with a 2 percent contraction. The overall jobless rate has grown to a record 17.6 percent.

The marches were powered mostly by young people. Unemployment among people under 25 is close to 40 percent.

The country's largest trade union, the General Confederation of Portuguese Workers, with some 600,000 members, also supported the marches and swelled numbers.

After several years of tax increases and welfare cuts, austerity is poised to deepen as the government looks for another €4 billion ($5.2 billion) to cut over the next two years, with the national health service, education, pensioners and government workers likely to be the hardest hit.

"There is no future without education, there is no future without culture," said student Ana Julia, 23. "We have to protest to get back what they are trying to take away from us."

The government is locked into debt-cutting measures in return for the €78 billion ($102 billion) financial rescue set up in 2011. More tax hikes this year sliced another chunk off wages.

___

Associated Press writer Harold Heckle in Madrid contributed to this report.

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AP: NY fracking held as Cuomo, RFK Jr. talk health

AP: NY fracking held as Cuomo, RFK Jr. talk health

ALBANY, N.Y. — New York Gov. Andrew Cuomo came as close as he ever has to approving fracking last month, laying out a limited drilling plan for as many as 40 gas wells before changing course to await the findings of a new study after discussions with environmentalist and former brother-in-law Robert F. Kennedy Jr., several people familiar with his thinking told The Associated Press.

The turning point, which could delay a decision for up to a year or longer, came in a series of phone calls with Kennedy. The two discussed a new health study on the hydraulic fracturing drilling method that could be thorough enough to trump all others in a debate that has split New York for five years.

"I think the issue suddenly got simple for him," Kennedy told the AP, then went on to paraphrase Cuomo in their discussions: "'If it's causing health problems, I really don't want it in New York state. And if it's not causing health problems, we should figure out a way we can do it.'"

Kennedy and two other people close to Cuomo, who spoke to the AP only on condition of anonymity because Cuomo is carefully guarding his discussions on the issue, confirmed the outlines of the plan the governor was considering to allow 10 to 40 test wells in economically depressed southern New York towns that want drilling and the jobs it promises. The plan would allow the wells to operate under intense monitoring by the state to see if fracking should continue or expand.

They all said it was the closest Cuomo has come in his two years in office to making a decision on whether to green-light drilling.

The state has had a moratorium on the process since 2008 while other states in the gas-rich Marcellus Shale formation, such as Pennsylvania, have seen local economies boom as drilling rigs have sprouted up.

Cuomo issued a brief statement Saturday through a spokesman saying that the state departments of environmental conservation and health are "in the process of making a determination with respect to the safety and health impacts of fracking.

"After, and only after, they conclude their work will the state's position be determined — it's that simple and it hasn't and doesn't change with any conversations," Cuomo spokesman Josh Vlasto said.

The governor continues to refuse to talk about his internal process and wouldn't comment directly for this story. He has been repeating the phrase he's used for two years, that "science, not politics" will rule.

Kennedy, brother of Cuomo's ex-wife, Kerry, described a governor who is intensely involved in the emotion-charged issue, which Cuomo privately likened to taking on the National Rifle Association over gun control laws. Kennedy said Cuomo reached out personally to many others as well in his evaluation.

Kennedy believes Cuomo held off in large part because of the prospect of a new $1 million study by the Geisinger Health System of Pennsylvania, billed by property owners seeking safe fracking and environmentalists as a "large-scale, scientifically rigorous assessment" of drilling in Pennsylvania.

The study will look at detailed health histories of hundreds of thousands of patients who live near wells and other facilities that are producing natural gas from the same Marcellus Shale formation that New York would tap.

Unlike most studies funded by advocates or opponents of hydrofracking, this study would be funded by the Sunbury, Pa.-based Degenstein Foundation, which is not seen as having an ideological bent.

"I think it will be pivotal," Kennedy said. Preliminary results are expected within the year, but there is no specific timetable and final results could be years off. Kennedy is opposed to fracking unless it can be proven to be safe for the environment and public. He said he's unsure what the Geisinger report will conclude.

The research and education arm of the Independent Petroleum Association of America cried foul at the private conversations of the powerful public figures.

"This is pretty outrageous, above and beyond the four-year charade that's already occurred," said Steve Everley of Energy in Depth. "The governor has insisted publicly that his review of hydraulic fracturing will be based on science, and yet he's actually making decisions about New York's future based on backroom conversations with a Kennedy.

"Maybe if Governor Cuomo had been as interested in speaking with other regulators as he was in speaking with his former brother-in-law, he would have recognized that shale development can be and is being done safely, and folks struggling to find work upstate might actually have jobs," Everley said.

Dan Fitzsimmons, leader of the Joint Landowners Coalition of New York, a pro-drilling group, said opposition to hydrofracking is based on politics, not science.

"Delay, delay delay, that's been the name of the game with these folks, and the sad thing about Cuomo is that he's allowing it," Fitzsimmons said. "How long are you going to throw away taxpayer dollars over politics?"

But Adrian Kuzminski, a fracking opponent with the group Sustainable Otsego, said he fears that the test wells Cuomo has been considering would be "a stalking horse" for more drilling.

"After a couple of years they're going to say 'Oh, we don't see any problems,'" Kuzminski said. "There's no need for test wells in New York state. The information is just out there."

Shortly after the conversations with Kennedy in early February, Cuomo's health commissioner, Dr. Nirav Shah, mentioned the Geisinger study among three health reviews still pending and which could enter into Cuomo's decision. Shah, a nationally respected public health figure, was an associate investigator at the Geisinger Center for Health Research before going to work for Cuomo.

Sandra Steingraber, a biologist and founder of New Yorkers Against Fracking, said Saturday, "As Health Commissioner Shah said, the right time to study fracking is before fracking begins. We expect that Governor Cuomo will listen to scientists and medical experts and let evidence dictate whether or not to lift our state's moratorium, and we further expect that he will wait for national studies and a real New York-specific study."

Cuomo, a popular Democrat who supporters say may run for president in 2016, is getting criticism from both sides over his delayed decision and calls for more studies. Landowners and industry say they're missing out on an economic boom while environmentalists say the administration should have ordered a full health study and has been too opaque about the regulatory process.

Some pundits have questioned whether Cuomo was "becoming Hamlet on the Shale," echoing a reference to criticism of his father, former Gov. Mario Cuomo, who spent politically damaging months as "Hamlet on the Hudson" publicly debating whether to run for president. It's a characterization Kennedy rejects.

Many federal and state regulators say hydraulic fracturing, which injects a mix of water and chemicals thousands of feet underground to crack open shale and release natural gas, is safe when done properly and thousands of sites have few complaints of pollution. But environmental groups and some doctors say regulations still aren't stringent enough and the practice can pollute ground water. The Marcellus Shale lies under parts of New York, Pennsylvania, Ohio and West Virginia.

"What's interesting is Andrew is trying to figure this out," Kennedy said. "It's interesting to see this ... that usually doesn't happen. (Most governors) take a poll, or they take industry money and just do it ... but I think this is the harder route."

___

Associated Press Writer Karen Matthews contributed to this report from New York City.

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Burlington's apples shine

Burlington High School, which gives every student an iPad to keep until graduation, has become a poster child for tech giant Apple.

The company will present staff and students with the Apple Distinguished School award on March 13 and laud the school's efforts to transform classroom learning through the company's technology on its website.

"It's nice for the staff and students to be recognized," Principal Mark Sullivan said yesterday. "This is our second full year using the iPad, and I think the biggest measure of success is that it's helped our kids become more creative and engaged in their classrooms."

Using different apps, students in psychology class, for example, are able to see a 3-D image showing each part of the human brain on their iPads, while students in anatomy class are able to see an image of a cat's anatomy. Teachers post homework on their blogs, and students, who have the option of buying the iPad at market price when they graduate, are able to compile curated portfolios of their writing or artwork that they can present to colleges or to employers in the future.

Dylan Smith, a 16-year-old junior, writes papers on his iPad, while Adriana Berardi, one of his classmates, takes notes on it.

"There is game-playing, but people are pretty disciplined with them," Smith said. "I honestly thought a lot of the teachers would not know how to use them, but it's worked out."

To help anyone who has a problem, the high school has designated its own version of Apple's "Genius Bar," staffed by a teacher and a handful of students each period, as part of a course for which they earn credit.

In all, more than 2,000 Burlington students have iPads at their disposal. In addition to high schoolers, there's one for every student in grades six through eight at Marshall Simonds Middle School; one first grade class in each of the town's four elementary schools; and every fourth and fifth grader at Pine Glen Elementary School, said Assistant Superintendent Patrick Larkin.

Even though elementary and middle school students can't take the devices home, the virtual blackboards are helping first-graders spell out words and increase their journal writing output, Larkin said, while older students are becoming better organized through apps like Explain Everything, Evernote and Genius Scan.

"We're supposed to be preparation for the real world, so what's going on in here should look like the real world," Larkin said. "We're getting our kids comfortable with resources they can use, no matter what device they're on. That's been a big focus for us."

Burlington schools pay for the iPads over a three-year period through an Apple equity lease program, he said, and their goal is to have one for every student in the district within two years. To date, Apple has sold more than 4.5 million iPads to U.S. schools.

Students are currently using the iPad 2, but school officials may invest in updated IPad models or iPad Mini, Larkin said.

"The thing we need to be clear on is we do have to monitor kids' screen time when they have their face in a device," Larkin said, adding the school district holds monthly "parent technology nights" to address any concerns parents may have over excessive technology use. "Obviously we still want to teach the social skills we've always taught."

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Tax bills for rich families approach 30-year high

WASHINGTON — Washington is gridlocked again over whether to raise taxes on the rich.

But it turns out that wealthy families already are paying some of their biggest federal tax bills in decades, even as the rest of the population continues to pay at historically low rates.

A new analysis shows that average tax bills for high-income families rarely have been higher since the Congressional Budget Office began tracking the data in 1979.

It's the middle- and low-income families who aren't paying as much as they used to.

Liberals say rich families can afford to pay higher taxes because their incomes have grown much more than incomes for middle- and low-income families.

Conservatives say raising taxes on the wealthy would reduce their incentive to save and invest, hurting long-term economic growth.

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