<PAGE> 1
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND Two World Trade Center
LETTER TO THE SHAREHOLDERS June 30, 2000 New York, New York 10048
DEAR SHAREHOLDER:
The U.S. economic expansion continued during the six-month period ended June 30,
2000. Real personal consumption accelerated and unemployment reached a 30-year
low. At the same time, a surge in oil prices heightened the risk of inflation.
The Federal Reserve Board responded by further tightening monetary policy. Three
increases in the federal funds rate, totaling 100 basis points, have occurred
since February. The rate now stands at a nine-year high of 6.50 percent.
Strong economic growth and a less accommodative monetary policy caused long-term
interest rates to increase throughout 1999. This January, however, the U.S.
Treasury announced plans to use the federal budget surplus to reduce its debt.
This announcement initially precipitated a 50 to 75 basis point drop in yields
of longer maturity Treasuries. Municipal bond yields also declined but lagged
the trend of Treasury yields. Long-term interest rates rose in April, but began
to decline in May and June as signs of an economic slowdown developed.
MUNICIPAL MARKET CONDITIONS
The long-term insured municipal index began the year at 5.97 percent. This index
reached a high of 6.19 percent in mid January and ended June at 5.84 percent.
Because bond prices move inversely to changes in interest rates, higher yields
caused bond prices to decline significantly last year and improve marginally in
the first six months of this year.
The ratio of municipal yields as a percentage of Treasury yields has
historically been used as a measure of relative value. The increase in the ratio
from 92 percent at the end of 1999 to 99 percent at the end of June may be
attributed to the magnitude of the rally in long-term Treasuries. A rising yield
ratio indicates weaker relative performance by municipals. Over the past five
years, the ratio has ranged between an average annual high of 93 percent and an
average annual low of 85 percent.
During the first six months of this year, new-issue volume was 22 percent lower
than the same period last year. Refunding activity, the most
<PAGE> 2
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
LETTER TO THE SHAREHOLDERS June 30, 2000, continued
interest-rate-sensitive component of new issue supply, dropped more than 70
percent and represented less than 10 percent of total volume. Approximately 40
percent of the underwritings were enhanced with bond insurance. New York
underwriting accounted for 9 percent of the national total.
30-YEAR BOND YIELDS 1994 - 2000
<TABLE>
<CAPTION>
Insured U.S. Insured Municipal Yields as a
Municipal Yields Treasury Yields Percentage of U.S. Treasury Yields
<S> <C> <C> <C>
1994 5.4% 6.34% 85.17%
5.4 6.24 86.54
5.8 6.66 87.09
6.4 7.09 90.27
6.35 7.32 86.75
6.25 7.43 84.12
6.5 7.61 85.41
6.25 7.39 84.57
6.3 7.45 84.56
6.55 7.81 83.87
6.75 7.96 84.8
7 8.00 87.5
6.75 7.88 85.66
1995 6.4 7.70 83.12
6.15 7.44 82.66
6.15 7.43 82.77
6.2 7.34 84.47
5.8 6.66 87.09
6.1 6.62 92.15
6.1 6.86 88.92
6 6.66 90.09
5.95 6.48 91.82
5.75 6.33 90.84
5.5 6.14 89.58
5.35 5.94 90.07
1996 5.4 6.03 89.55
5.6 6.46 86.69
5.85 6.66 87.84
5.95 6.89 86.36
6.05 6.99 86.55
5.9 6.89 85.63
5.85 6.97 83.93
5.9 7.11 82.98
5.7 6.93 82.25
5.65 6.64 85.09
5.5 6.35 86.61
5.6 6.63 84.46
1997 5.7 6.79 83.95
5.65 6.80 83.09
5.9 7.10 83.1
5.75 6.94 82.85
5.65 6.91 81.77
5.6 6.78 82.6
5.3 6.30 84.13
5.5 6.61 83.21
5.4 6.40 84.38
5.35 6.15 86.99
5.3 6.05 87.6
5.15 5.92 86.99
1998 5.15 5.80 88.79
5.2 5.92 87.84
5.25 5.93 88.53
5.35 5.95 89.92
5.2 5.80 89.66
5.2 5.65 92.04
5.18 5.71 90.72
5.03 5.27 95.45
4.95 5.00 99.00
5.05 5.16 97.87
5.00 5.06 98.81
5.05 5.10 99.02
1999 5.00 5.09 98.23
5.10 5.58 91.40
5.15 5.63 91.47
5.20 5.66 91.87
5.30 5.83 90.91
5.47 5.96 91.78
5.55 6.10 90.98
5.75 6.06 94.88
5.85 6.05 96.69
6.03 6.16 97.89
6.00 6.29 95.39
5.97 6.48 92.13
2000 6.18 6.49 95.22
6.04 6.14 98.37
5.82 5.83 99.83
5.91 5.96 99.16
5.91 6.01 98.34
5.84 5.90 98.98
</TABLE>
Source: Municipal Market Data - A Division of Thomson Financial Municipal Group
and Bloomberg L.P.
PERFORMANCE
For the six-month period ended June 30, 2000, Morgan Stanley Dean Witter New
York Tax-Free Income Fund's Class B shares returned 3.54 percent, compared to
4.48 percent for the Lehman Brothers Municipal Bond Index.(1) For the same
period, the Fund's Class A, C and D shares returned 3.62 percent, 3.54 percent
and 3.83 percent, respectively. The performance of the Fund's four share classes
varies because of differing expenses. Total return figures assume the
reinvestment of all distributions but do not reflect the deduction of any
applicable sales charges.
---------------------
(1) The Lehman Brothers Municipal Bond Index tracks the performance of municipal
bonds with maturities of two years or greater and a minimum credit rating of
Baa or BBB, as rated by Moody's Investors Service, Inc., or Standard &
Poor's Corporation, respectively. The index does not include any expenses,
fees or charges. The index is unmanaged and should not be considered an
investment.
2
<PAGE> 3
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
LETTER TO THE SHAREHOLDERS June 30, 2000, continued
PORTFOLIO STRUCTURE
The Fund's net assets of $120 million were diversified among 11 long-term
sectors and 29 credits. During the past six months the cash and short-term
investment position ranged between 6 and 9 percent of net assets. At the end of
June, the portfolio's average maturity was 15 years. Average duration, a measure
of sensitivity to interest-rate changes, was 8.1 years. The accompanying charts
provide current information on the portfolio's credit quality, maturity
distribution and sector concentrations. Optional call provisions and their
respective cost (book) yields are also charted by year.
LOOKING AHEAD
The Federal Reserve Board has expressed concern about consumer wealth and rising
prices. We anticipate that the central bank will continue to focus on inflation
and may increase short-term rates if it feels that the economic momentum is not
slowing sufficiently. We believe municipal bonds continue to offer tax-conscious
investors good long-term value.
As explained in footnote 7 of the Notes to Financial Statements, the Fund
acquired Morgan Stanley Dean Witter Multi-State Municipal Series Trust -- New
York Series on July 24, 2000.
We appreciate your ongoing support of Morgan Stanley Dean Witter New York
Tax-Free Income Fund and look forward to continuing to serve your investment
needs.
<TABLE>
<S> <C>
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
</TABLE>
3
<PAGE> 4
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
LETTER TO THE SHAREHOLDERS June 30, 2000, continued
[LARGEST SECTORS BAR CHART]
LARGEST SECTORS AS OF JUNE 30, 2000
(% OF NET ASSETS)
<TABLE>
<S> <C>
GENERAL OBLIGATION 16%
MORTGAGE 12%
ELECTRIC 11%
EDUCATION 11%
TRANSPORTATION 7%
WATER & SEWER 7%
IDR/PCR* 7%
</TABLE>
*INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL REVENUE
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
[CREDIT RATINGS PIE CHART]
CREDIT RATINGS AS OF JUNE 30, 2000
(% OF TOTAL LONG-TERM PORTFOLIO)
<TABLE>
<S> <C> <C> <C> <C> <C>
Aaa or AAA Aa or AA A or A Baa or BBB NR
31% 19% 36% 10% 4%
</TABLE>
AS MEASURED BY MOODY'S INVESTORS SERVICE, INC. OR
STANDARD & POOR'S CORP.
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
DISTRIBUTION BY MATURITY
(% OF NET ASSETS)
WEIGHTED AVERAGE
MATURITY 15 YEARS
<TABLE>
<S> <C>
UNDER 1 YEAR 6.4%
1-5 YEARS 4.0%
5-10 YEARS 15.1%
10-20 YEARS 45.6%
20-30 YEARS 21.4%
30+ YEARS 2.8%
</TABLE>
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
4
<PAGE> 5
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
LETTER TO THE SHAREHOLDERS June 30, 2000, continued
CALL AND COST (BOOK) YIELD STRUCTURE
JUNE 30, 2000
WEIGHTED AVERAGE
CALL PROTECTION: 7 YEARS
<TABLE>
<CAPTION>
YEARS BONDS
CALLABLE PERCENT CALLABLE*
----------- -----------------
<S> <C>
2000 1%
2001 16%
2002 8%
2003 2%
2004 9%
2005 5%
2006 10%
2007 0%
2008 19%
2009 4%
2010+ 26%
</TABLE>
WEIGHTED AVERAGE
BOOK YIELD: 6.3%
<TABLE>
<CAPTION>
COST (BOOK) YIELD **
--------------------
<S> <C>
2000 8.5%
2001 7.3%
2002 6.8%
2003 7.5%
2004 5.8%
2005 6.7%
2006 6.8%
2007
2008 5.3%
2009 5.5%
2010+ 6.1%
</TABLE>
* % Based on Long-Term Portfolio.
** Cost or "book" yield is the annual income earned on a portfolio investment
based on its original purchase price before fund operating expenses. For
example, the fund earned a book yield of 7.3% on the 16% of the bonds in
the long-term portfolio that are callable in 2001.
Portfolio structure is subject to change.
5
<PAGE> 6
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FUND PERFORMANCE June 30, 2000
AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES*
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 6/30/00
-------------------------
1 Year 1.01%(1) -3.28%(2)
Since Inception (7/28/97) 2.83%(1) 1.31%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES**
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 6/30/00
-------------------------
1 Year 0.56%(1) -4.27%(2)
5 Years 4.41%(1) 4.08%(2)
10 Years 5.80%(1) 5.80%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES+
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 6/30/00
-------------------------
1 Year 0.63%(1) -0.33%(2)
Since Inception (7/28/97) 2.33%(1) 2.33%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES++
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 6/30/00
-------------------------
1 Year 1.22%(1)
Since Inception (7/28/97) 3.11%(1)
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
---------------------
<TABLE>
<S> <C>
(1) Figure shown assumes reinvestment of all distributions and
does not reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and
the deduction of the maximum applicable sales charge. See
the Fund's current prospectus for complete details on fees
and sales charges.
* The maximum front-end sales charge for Class A is 5.25%.
** The maximum contingent deferred sales charge (CDSC) for
Class B is 5.0%. The CDSC declines to 0% after six years.
+ The maximum CDSC for Class C shares is 1% for shares
redeemed within one year of purchase.
++ Class D shares have no sales charge.
</TABLE>
6
<PAGE> 7
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW YORK TAX-EXEMPT MUNICIPAL BONDS (90.6%)
General Obligation (16.2%)
Monroe County,
$ 1,000 Public Improvement Refg 1996.............................. 6.00% 03/01/13 $ 1,070,600
1,000 Public Improvement Refg 1996.............................. 6.00 03/01/15 1,069,620
New York City,
2,055 Various Purpose 1973...................................... 3.50 05/01/01 2,039,053
2,500 Various Purpose 1973...................................... 3.50 05/01/03 2,414,025
605 1997 Ser D................................................ 6.00 08/01/06 605,666
New York State,
2,000 Ser 1996 A Refg........................................... 6.00 07/15/08 2,126,960
3,000 Ser 1995 B Refg........................................... 5.70 08/15/13 3,052,800
8,000 Puerto Rico, Public Improvement Refg Ser 1987 A............. 3.00 07/01/06 7,075,759
-------- -----------
20,160 19,454,483
-------- -----------
Educational Facilities Revenue (11.1%)
New York State Dormitory Authority,
965 City University Ser 1992 U................................ 6.375 07/01/08 1,005,221
3,000 City University Ser 1993 A................................ 5.75 07/01/09 3,087,000
1,000 Ithaca College Ser 1998 (AMBAC)........................... 5.00 07/01/21 899,100
1,000 New York University Ser 1998 A (MBIA)..................... 5.75 07/01/15 1,038,810
3,000 State University Ser 1989 B............................... 0.00 05/15/05 2,342,460
2,000 State University Ser 1993 C............................... 5.375 05/15/13 1,982,460
2,000 State University Ser 1993 A............................... 5.25 05/15/15 1,971,480
1,000 University of Rochester, Ser 1998 A (MBIA)................ 5.00 07/01/23 890,950
-------- -----------
13,965 13,217,481
-------- -----------
Electric Revenue (11.4%)
Long Island Power Authority,
6,000 Ser 2000 A (FSA).......................................... 0.00 06/01/18 2,165,040
4,000 Ser 1998 A (FSA).......................................... 5.125 12/01/22 3,635,520
8,000 Puerto Rico Electric Power Authority, Power Ser O........... 5.00 07/01/12 7,816,560
-------- -----------
18,000 13,617,120
-------- -----------
Hospital Revenue (4.1%)
5,000 New York State Medical Care Facilities Agency, Hospital &
-------- Nursing Home - FHA Insured Mtge 1993 Ser B................. 5.50 02/15/22 4,904,950
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE> 8
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 2000 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Industrial Development/Pollution Control Revenue (6.7%)
$ 2,000 New York City Industrial Development Agency, Brooklyn Navy
Yard Cogeneration Partners LP Ser 1997 (AMT)............... 5.75% 10/01/36 $ 1,732,560
5,500 New York State Energy Research & Development Authority,
Brooklyn Union Gas Co 1991 Ser A (AMT)..................... 9.26++ 07/01/26 6,235,625
-------- -----------
7,500 7,968,185
-------- -----------
Mortgage Revenue - Multi-Family (7.8%)
New York City Housing Development Corporation,
2,173 East Midtown Proj - FHA Ins Sec 223....................... 6.50 11/15/18 2,136,442
2,201 Ruppert Proj - FHA Ins Sec 223............................ 6.50 11/15/18 2,130,703
4,935 New York State Housing Finance Agency, Mortgage 1996 Ser A
Refg (FSA)................................................. 6.10 11/01/15 5,045,396
-------- -----------
9,309 9,312,541
-------- -----------
Mortgage Revenue - Single Family (3.9%)
4,500 New York State Mortgage Agency, Homeowner Ser 27............ 6.90 04/01/15 4,714,560
-------- -----------
Nursing & Health Related Facilities Revenue (4.3%)
New York State Medical Care Facilities Finance Agency,
2,295 Long-Term Health Care 1992 Ser D (FSA).................... 6.50 11/01/15 2,412,275
3,000 Mental Health Ser F....................................... 5.25 02/15/19 2,758,950
-------- -----------
5,295 5,171,225
-------- -----------
Transportation Facilities Revenue (6.8%)
3,000 New York State Thruway Authority, Local Highway & Bridge Ser
1998 A (MBIA).............................................. 5.00 04/01/18 2,745,210
2,000 Triborough Bridge & Tunnel Authority, Refg Ser 1998 A
(MBIA)..................................................... 4.75 01/01/24 1,711,820
Puerto Rico Highway & Transportation Authority,
2,000 Refg Ser X................................................ 5.50 07/01/15 2,030,680
2,000 Ser 1998 A................................................ 4.75 07/01/38 1,645,200
-------- -----------
9,000 8,132,910
-------- -----------
Water & Sewer Revenue (7.2%)
3,000 New York City Municipal Water Finance Authority, 1998 Ser
D.......................................................... 4.75 06/15/25 2,541,810
2,000 New York State Environmental Facilities Corporation, Clean
Drinking Water
Ser 1998 C................................................. 5.00 06/15/19 1,821,680
4,000 Suffolk Country Industrial Development Agency, Southwest
Sewer Ser 1994 (FGIC)...................................... 6.00 02/01/08 4,242,000
-------- -----------
9,000 8,605,490
-------- -----------
Other Revenue (8.2%)
5,000 New York City Transitional Finance Authority, 2000 Ser C.... 5.50 11/01/29 4,769,000
5,000 New York Local Government Assistance Corporation, Ser 1993
C.......................................................... 5.50 04/01/17 5,015,850
-------- -----------
10,000 9,784,850
-------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 2000 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Refunded (2.9%)
$ 2,965 New York State Dormitory Authority, Suffolk County Judicial
Ser 1986 (ETM)............................................. 7.375% 07/01/16 $ 3,446,753
-------- -----------
114,694 TOTAL NEW YORK TAX-EXEMPT MUNICIPAL BONDS (Identified Cost $103,976,744)........ 108,330,548
-------- -----------
SHORT-TERM NEW YORK TAX-EXEMPT MUNICIPAL OBLIGATIONS (4.7%)
1,000 New York State Dormitory Authority, Cornell University Ser
1990 B (Demand 07/03/00)................................... 4.45* 07/01/25 1,000,000
2,600 New York State Energy Research & Development Authority, New
York State Electric & Gas Corp Ser 1994 C (Demand
07/03/00).................................................. 4.50* 06/01/29 2,600,000
2,000 Port Authority of New York & New Jersey, Ser 2 (Demand
07/03/00).................................................. 4.30* 05/01/19 2,000,000
-------- -----------
5,600 TOTAL SHORT-TERM NEW YORK TAX-EXEMPT MUNICIPAL OBLIGATIONS
-------- (Identified Cost $5,600,000)................................................... 5,600,000
-----------
$120,294 TOTAL INVESTMENTS (Identified Cost $109,576,744) (a).................. 95.3% 113,930,548
========
OTHER ASSETS IN EXCESS OF LIABILITIES................................... 4.7 5,614,599
----- -----------
NET ASSETS............................................................. 100.0% $119,545,147
===== ===========
</TABLE>
---------------------
<TABLE>
<C> <S>
AMT Alternative Minimum Tax.
ETM Escrowed to maturity.
* Current coupon of variable rate demand obligation.
++ Current coupon rate for residual interest bond. This rate resets periodically as the auction rate on the
related short-term securities fluctuates.
(a) The aggregate cost for federal income tax purposes approximates identified cost. The aggregate gross
unrealized appreciation is $6,197,455 and the aggregate gross unrealized depreciation is $1,843,651, resulting
in net unrealized appreciation of $4,353,804.
Bond Insurance:
--------------
AMBAC AMBAC Assurance Corporation.
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $109,576,744)............................. $113,930,548
Cash........................................................ 139,765
Receivable for:
Investments sold........................................ 4,041,344
Interest................................................ 1,670,899
Shares of beneficial interest sold...................... 3,100
Prepaid expenses and other assets........................... 35,985
------------
TOTAL ASSETS............................................ 119,821,641
------------
LIABILITIES:
Payable for:
Plan of distribution fee................................ 72,905
Investment management fee............................... 53,714
Dividends and distributions to shareholders............. 28,391
Shares of beneficial interest repurchased............... 6,371
Accrued expenses............................................ 115,113
------------
TOTAL LIABILITIES....................................... 276,494
------------
NET ASSETS.............................................. $119,545,147
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $116,406,395
Net unrealized appreciation................................. 4,353,804
Accumulated undistributed net investment income............. 16,454
Accumulated net realized loss............................... (1,231,506)
------------
NET ASSETS.............................................. $119,545,147
============
CLASS A SHARES:
Net Assets.................................................. $619,769
Shares Outstanding (unlimited authorized, $.01 par value)... 56,222
NET ASSET VALUE PER SHARE............................... $11.02
============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 4.44% of net asset value)........ $11.51
============
CLASS B SHARES:
Net Assets.................................................. $117,787,953
Shares Outstanding (unlimited authorized, $.01 par value)... 10,649,295
NET ASSET VALUE PER SHARE............................... $11.06
============
CLASS C SHARES:
Net Assets.................................................. $948,510
Shares Outstanding (unlimited authorized, $.01 par value)... 85,941
NET ASSET VALUE PER SHARE............................... $11.04
============
CLASS D SHARES:
Net Assets.................................................. $188,915
Shares Outstanding (unlimited authorized, $.01 par value)... 17,118
NET ASSET VALUE PER SHARE............................... $11.04
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE> 11
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL STATEMENTS, June 30, 2000
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (unaudited)
NET INVESTMENT INCOME:
INTEREST INCOME............................................. $ 3,504,344
------------
EXPENSES
Plan of distribution fee (Class A shares)................... 537
Plan of distribution fee (Class B shares)................... 447,799
Plan of distribution fee (Class C shares)................... 3,374
Investment management fee................................... 332,477
Professional fees........................................... 38,197
Shareholder reports and notices............................. 33,021
Transfer agent fees and expenses............................ 28,461
Trustees' fees and expenses................................. 9,342
Registration fees........................................... 6,188
Custodian fees.............................................. 3,614
Other....................................................... 4,185
------------
TOTAL EXPENSES.......................................... 907,195
Less: expense offset........................................ (3,608)
------------
NET EXPENSES............................................ 903,587
------------
NET INVESTMENT INCOME................................... 2,600,757
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss........................................... (1,142,989)
Net change in unrealized appreciation....................... 2,675,187
------------
NET GAIN................................................ 1,532,198
------------
NET INCREASE................................................ $ 4,132,955
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE> 12
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL STATEMENTS, June 30, 2000
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED
2000 DECEMBER 31, 1999
--------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................... $ 2,600,757 $ 5,965,968
Net realized loss................................... (1,142,989) (88,517)
Net change in unrealized appreciation............... 2,675,187 (12,708,366)
------------ ------------
NET INCREASE (DECREASE)......................... 4,132,955 (6,830,915)
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares.................................. (10,296) (19,141)
Class B shares.................................. (2,567,235) (5,881,219)
Class C shares.................................. (19,279) (31,200)
Class D shares.................................. (3,947) (13,412)
Net realized gain
Class A shares.................................. -- (720)
Class B shares.................................. -- (247,643)
Class C shares.................................. -- (1,330)
Class D shares.................................. -- (146)
------------ ------------
TOTAL DIVIDENDS AND DISTRIBUTIONS............... (2,600,757) (6,194,811)
------------ ------------
Net decrease from transactions in shares of
beneficial interest................................ (8,125,106) (24,736,170)
------------ ------------
NET DECREASE.................................... (6,592,908) (37,761,896)
NET ASSETS:
Beginning of period................................. 126,138,055 163,899,951
------------ ------------
END OF PERIOD
(Including undistributed net investment income
of $16,454 and $16,454, respectively)........... $119,545,147 $126,138,055
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE> 13
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter New York Tax-Free Income Fund (the "Fund") is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
a diversified, open-end management investment company. The Fund's investment
objective is to provide a high level of current income which is exempt from
federal, New York State and New York City income tax, consistent with the
preservation of capital. The Fund was organized as a Massachusetts business
trust on January 17, 1985 and commenced operations on April 25, 1985. On July
28, 1997, the Fund converted to a multiple class share structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Portfolio securities are valued for the Fund by
an outside independent pricing service approved by the Trustees. The pricing
service has informed the Fund that in valuing the Fund's portfolio securities,
it uses both a computerized matrix of tax-exempt securities and evaluations by
its staff, in each case based on information concerning market transactions and
quotations from dealers which reflect the bid side of the market each day. The
Fund's portfolio securities are thus valued by reference to a combination of
transactions and quotations for the same or other securities believed to be
comparable in quality, coupon, maturity, type of issue, call provisions, trading
characteristics and other features deemed to be relevant. Short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
debt securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
13
<PAGE> 14
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited)
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
The Fund amortizes premiums and accretes discounts over the life of the
respective securities. Interest income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record date. The amount of dividends
and distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as dividends in excess
of net investment income or distributions in excess of net realized capital
gains. To the extent they exceed net investment income and net realized capital
gains for tax purposes, they are reported as distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Morgan Stanley Dean Witter
Advisors Inc. (the "Investment Manager"), the Fund pays the Investment Manager a
management fee, accrued daily and payable monthly, by applying the following
annual rates to the Fund's net assets determined as of the close of each
business day: 0.55% to the portion of daily net assets not exceeding $500
million and 0.525% to the portion of daily net assets exceeding $500 million.
14
<PAGE> 15
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited)
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A -- up
to 0.25% of the average daily net assets of Class A; (ii) Class B -- 0.75% of
the lesser of: (a) the average daily aggregate gross sales of the Class B shares
since the inception of the Fund (not including reinvestment of dividend or
capital gain distributions) less the average daily aggregate net asset value of
the Class B shares redeemed since the Fund's inception upon which a contingent
deferred sales charge has been imposed or waived; or (b) the average daily net
assets of Class B; and (iii) Class C -- up to 0.75% of the average daily net
assets of Class C.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts totaled $1,433,189
at June 30, 2000.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 0.75% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the six months ended June 30, 2000, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.21% and
0.75%, respectively.
The Distributor has informed the Fund that for six months ended June 30, 2000,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class B shares of $51,136 and received $4,476 in front-end sales charges
from sales of the Fund's Class A shares. The respective shareholders pay such
charges which are not an expense of the Fund.
15
<PAGE> 16
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited)
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended June 30, 2000 aggregated
$6,940,300 and $20,865,833, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 2000, the Fund had
transfer agent fees and expenses payable of approximately $1,500.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the six months ended June 30, 2000
included in Trustees' fees and expenses in the Statement of Operations amounted
to $2,972. At June 30, 2000, the Fund had an accrued pension liability of
$51,912 which is included in accrued expenses in the Statement of Assets and
Liabilities.
5. FEDERAL INCOME TAX STATUS
At December 31, 1999, the Fund had a net capital loss carryover of approximately
$75,000 which will be available through December 31, 2007 to offset future
capital gains to the extent provided by regulations.
Capital losses incurred after October 31 ("post-October" losses) within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
approximately $14,000 during fiscal 1999.
16
<PAGE> 17
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited)
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999
------------------------- -------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold........................................................ 17,977 $ 196,123 4,285 $ 50,710
Reinvestment of dividends and distributions................. 811 8,819 1,235 13,955
Redeemed.................................................... (3) (33) (1,122) (12,769)
--------- ------------ --------- -----------
Net increase -- Class A..................................... 18,785 204,909 4,398 51,896
--------- ------------ --------- -----------
CLASS B SHARES
Sold........................................................ 385,481 4,182,787 627,835 7,314,347
Reinvestment of dividends and distributions................. 131,358 1,430,032 306,084 3,506,005
Redeemed.................................................... (1,299,538) (14,107,981) (3,146,578) (35,869,267)
--------- ------------ --------- -----------
Net decrease -- Class B..................................... (782,699) (8,495,162) (2,212,659) (25,048,915)
--------- ------------ --------- -----------
CLASS C SHARES
Sold........................................................ 11,215 120,991 23,520 265,569
Reinvestment of dividends and distributions................. 1,078 11,717 2,279 26,032
Redeemed.................................................... (3,463) (37,300) (12,997) (146,628)
--------- ------------ --------- -----------
Net increase -- Class C..................................... 8,830 95,408 12,802 144,973
--------- ------------ --------- -----------
CLASS D SHARES
Sold........................................................ 6,214 67,348 1,194,426 13,227,353
Reinvestment of dividends and distributions................. 220 2,391 291 3,322
Redeemed.................................................... -- -- (1,190,946) (13,114,799)
--------- ------------ --------- -----------
Net increase -- Class D..................................... 6,434 69,739 3,771 115,876
--------- ------------ --------- -----------
Net decrease in Fund........................................ (748,650) $ (8,125,106) (2,191,688) $(24,736,170)
========= ============ ========= ===========
</TABLE>
17
<PAGE> 18
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited)
7. SUBSEQUENT EVENT
On July 24, 2000, the Fund acquired all the net assets of Morgan Stanley Dean
Witter Multi-State Municipal Series Trust -- New York Series ("New York Series")
based on the respective valuations as of the close of business on July 21, 2000,
pursuant to a plan of reorganization approved by the shareholders of New York
Series on June 22, 2000. The acquisition was accomplished by a tax-free exchange
of 916,653 Class D shares of the Fund at a net asset value of $11.12 per share
for 983,898 shares of New York Series. The net assets of the Fund and New York
Series immediately before the acquisition were $119,539,566, and $10,197,330,
respectively, including unrealized appreciation of $168,897 for New York Series.
Immediately after the acquisition, the combined assets of the Fund amounted to
$129,736,896.
18
<PAGE> 19
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JUNE 30, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS A SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................. $10.89 $11.90 $12.16 $12.02
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income................................ 0.26 0.53 0.55 0.24
Net realized and unrealized gain (loss).............. 0.13 (1.00) 0.13 0.14
------ ------ ------ ------
Total income (loss) from investment operations........ 0.39 (0.47) 0.68 0.38
------ ------ ------ ------
Less dividends and distributions from:
Net investment income................................ (0.26) (0.52) (0.55) (0.24)
Net realized gain.................................... -- (0.02) (0.39) --
------ ------ ------ ------
Total dividends and distributions..................... (0.26) (0.54) (0.94) (0.24)
------ ------ ------ ------
Net asset value, end of period........................ $11.02 $10.89 $11.90 $12.16
====== ====== ====== ======
TOTAL RETURN+......................................... 3.62%(1) (4.03)% 5.68% 3.24%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................. 0.96%(2)(4) 0.89 %(4) 0.93%(3)(4) 0.92%(2)
Net investment income................................. 4.84%(2)(4) 4.58 %(4) 4.50%(4) 4.78%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............... $620 $408 $393 $94
Portfolio turnover rate............................... 6%(1) 3 % 24% 10%
</TABLE>
---------------------
* The date shares were first issued.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Does not reflect the effect of expense offset of 0.01%.
(4) Reflects overall fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE> 20
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED DECEMBER 31,
MONTHS ENDED -----------------------------------------------------------------
JUNE 30, 2000 1999 1998 1997* 1996 1995
-------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period..... $10.91 $11.92 $12.16 $11.71 $11.96 $10.83
------ -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income................... 0.23 0.46 0.49 0.51 0.53 0.55
Net realized and unrealized gain
(loss)................................ 0.15 (0.99) 0.15 0.45 (0.21) 1.20
------ -------- -------- -------- -------- --------
Total income (loss) from investment
operations.............................. 0.38 (0.53) 0.64 0.96 0.32 1.75
------ -------- -------- -------- -------- --------
Less dividends and distributions from:
Net investment income................... (0.23) (0.46) (0.49) (0.51) (0.53) (0.54)
Net realized gain....................... -- (0.02) (0.39) -- (0.04) (0.08)
------ -------- -------- -------- -------- --------
Total dividends and distributions........ (0.23) (0.48) (0.88) (0.51) (0.57) (0.62)
------ -------- -------- -------- -------- --------
Net asset value, end of period........... $11.06 $10.91 $11.92 $12.16 $11.71 $11.96
====== ======== ======== ======== ======== ========
TOTAL RETURN+............................ 3.54%(1) (4.58)% 5.32% 8.43% 2.82% 16.59%
RATIOS TO AVERAGE NET ASSETS:
Expenses................................. 1.50%(2)(4) 1.48%(4) 1.44%(3)(4) 1.43%(3) 1.40%(3) 1.42%(3)
Net investment income.................... 4.30%(2)(4) 3.99%(4) 3.99%(4) 4.33% 4.54% 4.70%
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands............................... $117,788 $124,774 $162,659 $169,868 $192,192 $216,618
Portfolio turnover rate.................. 6%(1) 3% 24% 10% 16% 17%
</TABLE>
---------------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B shares.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Does not reflect the effect of expense offset of 0.01%.
(4) Reflects overall fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE> 21
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JUNE 30, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS C SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................. $10.89 $11.90 $12.14 $12.02
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income................................ 0.23 0.46 0.48 0.22
Net realized and unrealized gain (loss).............. 0.15 (0.99) 0.15 0.12
------ ------ ------ ------
Total income (loss) from investment operations........ 0.38 (0.53) 0.63 0.34
------ ------ ------ ------
Less dividends and distributions from:
Net investment income................................ (0.23) (0.46) (0.48) (0.22)
Net realized gain.................................... -- (0.02) (0.39) --
------ ------ ------ ------
Total dividends and distributions..................... (0.23) (0.48) (0.87) (0.22)
------ ------ ------ ------
Net asset value, end of period........................ $11.04 $10.89 $11.90 $12.14
====== ====== ====== ======
TOTAL RETURN+......................................... 3.54%(1) (4.60)% 5.30% 2.83%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................. 1.50%(2)(4) 1.48 %(4) 1.44%(3)(4) 1.40%(2)
Net investment income................................. 4.30%(2)(4) 3.99 %(4) 3.99%(4) 4.12%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............... $949 $840 $765 $108
Portfolio turnover rate............................... 6%(1) 3 % 24% 10%
</TABLE>
---------------------
* The date shares were first issued.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Does not reflect the effect of expense offset of 0.01%.
(4) Reflects overall fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE> 22
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JUNE 30, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS D SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................. $10.90 $11.91 $12.15 $12.02
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income................................ 0.27 0.55 0.58 0.26
Net realized and unrealized gain (loss).............. 0.14 (1.00) 0.15 0.13
------ ------ ------ ------
Total income (loss) from investment operations........ 0.41 (0.45) 0.73 0.39
------ ------ ------ ------
Less dividends and distributions from:
Net investment income................................ (0.27) (0.54) (0.58) (0.26)
Net realized gain.................................... -- (0.02) (0.39) --
------ ------ ------ ------
Total dividends and distributions..................... (0.27) (0.56) (0.97) (0.26)
------ ------ ------ ------
Net asset value, end of period........................ $11.04 $10.90 $11.91 $12.15
====== ====== ====== ======
TOTAL RETURN+......................................... 3.83%(1) (3.87)% 6.12% 3.27%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................. 0.75%(2)(4) 0.73 %(4) 0.69%(3)(4) 0.66%(2)
Net investment income................................. 5.05%(2)(4) 4.74 %(4) 4.74%(4) 5.04%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............... $189 $116 $82 $32
Portfolio turnover rate............................... 6%(1) 3 % 24% 10%
</TABLE>
---------------------
* The date shares were first issued.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Does not reflect the effect of expense offset of 0.01%.
(4) Reflects overall fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE> 23
MORGAN STANLEY DEAN WITTER NEW YORK TAX-FREE INCOME FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.
The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent accountants as of July 1,
2000.
23
<PAGE> 24
TRUSTEES
----------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
----------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
James F. Willison
Vice President
Joseph R. Arcieri
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
----------------------------------
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
----------------------------------
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
----------------------------------
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants and accordingly they
do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.
Morgan Stanley Dean Witter Distributors Inc., member NASD.
MORGAN STANLEY
DEAN WITTER
NEW YORK
TAX-FREE
INCOME FUND
[GRAPHIC]
Semiannual Report
June 30, 2000
