SPARTAN(Registered trademark) MARYLAND MUNICIPAL INCOME FUND
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION
DATED OCTOBER 18, 1993
The following information updates that found in the section entitled
"Performance" beginning on page 11.
The following table shows the effect of a shareholder's tax status on
effective yield under federal, state, and county income tax laws for
199 4 . They show the approximate yield a taxable security must
provide at various income brackets to produce after-tax yields equivalent
to those of hypothetical tax-exempt obligations yielding from 2 .0%
to 7 . 0 %. Of course, no assurance can be given that the fund
will achieve any specific tax-exempt yield. While the fund invests
principally in obligations whose interest is exempt from federal and state
income tax, other income received by the fund may be taxable. The tables
do not take into account local taxes, if any, payable on the fund's
distributions.
199 4 TAX RATES AND TAX EQUIVALENT YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Combined Maryland
Single Return Joint Return Federal Maryland and Federal Effective
Taxable Income* Taxable Income Tax Bracket Marginal Rate Tax Bracket*
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
$22, 751 - 5 5 , 1 00 $3 8 , 001 - 91 , 850 28% 5% 33.76%*
5 5 , 101 - 100,000 91 , 851 - 140,000 31% 5% 36.52%*
100,001 - 115,000 ------- ------- 31% 5% 37.21%*
------- -------- 140,001 - 150,000 36% 5% 41.12%*
115,001 - 250,000 150,001 - 250,000 36% 6% 41.76%**
250,001 + 250,001 + 39.6% 6% 45.04%**
</TABLE>
* Combined Maryland and federal effective tax brackets take into account
the highest combined Maryland state and county income tax rate of 8.00%
(applicable to residents of Allegany, Prince George's, Montgomery, and
Talbot counties.)
** Combined Maryland and federal effective tax bracket takes into account
the combined highest Maryland state and county income tax rate of 9.00%
(applicable to residents of all counties except Worcester county.) For
Prince George's, Montogmery, and Talbot counties, the county income tax
rate is equal to 60% of Maryland state taxes. For Baltimore county, the
county income tax rate is 55% of the state tax. For Worcester county, the
county income tax rate is 30% of the state tax. The county income tax rate
for the remaining counties of the State of Maryland is 50% of the state
tax. According to Maryland tax laws, the highest county tax rate that can
be assessed to residents taxed at the 6.00% marginal state rate is 50% of
the state tax. Figures are tax-effected to reflect the federal tax benefit
for persons who itemize deductions.
Having determined your effective tax bracket above, use the following table
to determine the tax equivalent yield for a given tax-free yield.
If your combined effective federal, state and county personal income tax
rate in 199 4 is:
33.76% 36.52% 37.21% 41.12% 41.76% 45.04%
<TABLE>
<CAPTION>
<S> <C>
To match these
tax-free rates: Your taxable investment would have to earn the following yield:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
2 % 3 .0 2 % 3 . 15 % 3 . 19 % 3 . 40 % 3.43 % 3.64 %
3 % 4.53 % 4.73 % 4.78 % 5.10 % 5.15 % 5.46 %
4% 6.04% 6.30% 6.37% 6.79% 6.87% 7.28%
5% 7.55% 7.88% 7.96% 8.49% 8.59% 9.10%
6% 9.06% 9.45% 9.56% 10.19% 10.30% 10.92%
7% 10.57% 11.03% 11.15% 11.89% 12.02% 12.74%
</TABLE>
SMDB-9 4 - 1 February 18, 1994
