================================================================================
TO THE SHAREHOLDERS
--------------------------------------------------------------------------------
We are pleased to update you on Seligman Pennsylvania Tax-Exempt Fund at its
mid-year, March 31, 1996.
During the past six months, total dividends for Class A shares were $0.186 per
share. Net asset value of Class A shares was $7.74 per share at March 31, down
from $7.79 at September 30, 1995. For Class D shares, total dividends were
$0.156 per share. Net asset value of Class D shares was $7.74 per share at March
31, down from $7.78 at September 30, 1995. A capital gain distribution of $0.093
per share was paid on November 17, 1995, to Class A and D shareholders of record
November 13, 1995.
Turning to the economy, the Federal Reserve Board began lowering the federal
funds rate -- the interest rate charged for interbank loans -- in July 1995 in
response to a slowdown in the rate of economic growth and a stable rate of
inflation. This less restrictive monetary policy encouraged the continuation of
the decline in long-term interest rates through 1995 and into 1996. During the
middle of the first quarter of 1996, however, the economy began to exhibit signs
of strength. Up to this point, the municipal bond market was rallying in
anticipation of an additional Fed easing of short-term interest rates. The
realization that a continued lowering of the federal funds rate was no longer
imminent caused long-term interest rates to spike sharply.
Overall, municipal market psychology has been improving since the end of
1995. Tax reform legislation appears to have faded as an issue in the
presidential race, thereby easing the concerns that overshadowed the municipal
market in 1995. This, together with the higher yields available, has stimulated
demand. While new issue supply has slowed recently due to market conditions,
total first-quarter volume was 35% higher compared to last year's first quarter.
In your Fund, your Manager views the current interest rate environment as an
opportunity to purchase long-term municipal bonds at levels not seen since
September 1995. While we believe that the increase in municipal yields is
temporary, the market may remain unsettled until participants are convinced that
the economy is not re-accelerating. Therefore, new purchases have been
concentrated in current coupon bonds, which are generally less volatile than
discount or zero coupon bonds during periods of uncertainty.
Going forward, we believe the most likely outcome for 1996 is continued
moderate economic growth. However, in the event that the economy exceeds its
non-inflationary potential, we are confident that the Fed will act swiftly to
prevent the economy from growing at an unsustainable rate.
For any additional information about Seligman Pennsylvania Tax-Exempt Fund,
or your investment in its shares, please write or call using the toll-free
telephone numbers listed on page 11.
By order of the Trustees,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
May 3, 1996
1
<PAGE>
================================================================================
SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND
--------------------------------------------------------------------------------
HIGHLIGHTS March 31, 1996 CLASS A CLASS D
--------------------------------------------------------------------------------
NET ASSETS (in thousands) $32,408 $903
--------------------------------------------------------------------------------
YIELD* 4.35% 3.77%
--------------------------------------------------------------------------------
DIVIDENDS** $0.186 $0.156
--------------------------------------------------------------------------------
CAPITAL GAIN DISTRIBUTION** $0.093 $0.093
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
One Year
With sales charge/CDSL(1) 2.17% 5.30%
Without sales charge/CDSL(2) 7.24 6.30
Five Years
With sales charge(1) 6.71 n/a
Without sales charge(2) 7.74 n/a
Since inception July 15, 1986 February 1, 1994
With sales charge(1) 7.41% n/a
Without sales charge/CDSL(2) 7.96 1.82%
--------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $7.74 $7.74
--------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE $8.13 $7.74
--------------------------------------------------------------------------------
MOODY'S/S&P RATINGS+
Aaa/AAA 69%
Aa/AA 22
A/A 7
Baa/BBB 2
--------------------------------------------------------------------------------
HOLDINGS BY MARKET SECTOR+
Revenue Bonds 83%
General Obligation Bonds 17
-------------------------------------------------------------------------------
WEIGHTED AVERAGE MATURITY (Years) 23.1
-------------------------------------------------------------------------------
* Current yield representing the annualized yield for the 30-day period ended
March 31, 1996.
** Represents per share amount paid or declared for the six months ended March
31, 1996.
(1) Represents the average compound rate of return per year over the specified
period and reflects changes in price and assumes all distributions within
the period are reinvested in additional shares; also reflects the effect of
the 4.75% maximum initial sales charge or contingent deferred sales load
("CDSL") of 1%, if applicable.
(2) Represents the rate of return as above, but does not reflect the effect of
the 4.75% maximum initial sales charge or 1% CDSL.
+ Percentages based on current market values of long-term holdings.
Note: The yields have been computed in accordance with current SEC
regulations and will vary, and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their
original cost. A small portion of the Fund's income dividends may be
subject to applicable state and local taxes, and to the federal alternative
minimum tax. Past performance is not indicative of future investment
results.
2
<PAGE>
================================================================================
Portfolio of Investments MARCH 31, 1996
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE RATINGS MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P+ VALUE
---------- ---------------------- ------------- ------------
<S> <C> <C>
$1,500,000 Allegheny County, PA Airport Rev. (Greater Pittsburgh International Airport),
6.80% due 1/1/2010*............................................................... Aaa/AAA $ 1,610,715
1,000,000 Berks County Municipal Authority, PA Hospital Rev. (The Reading Hospital & Medical
Center Project), 5.70% due 10/1/2014.............................................. Aaa/AAA 996,600
1,000,000 Berks County Municipal Authority, PA Hospital Rev. (The Reading Hospital & Medical
Center Project), 6.10% due 10/1/2023.............................................. Aaa/AAA 1,020,200
1,000,000 Delaware County Authority, PA (Haverford College Rev.), 5-1/2% due 11/15/2023 .... Aaa/AAA 950,950
1,000,000 Delaware County Industrial Development Authority, PA
(Philadelphia Suburban Water Company), 6.35% due 8/15/2025*....................... Aaa/AAA 1,026,820
1,000,000 Delaware County, PA G.O.'s, 6% due 11/15/2022....................................... Aa/AA 1,005,340
1,000,000 Franklin County, PA Industrial Development Authority Hospital Rev.
(The Chambersburg Hospital Project), 6-1/4% due 7/1/2022.......................... Aaa/AAA 1,027,760
1,000,000 Lehigh County, PA G.O.'s, 6.90% due 8/1/2011........................................ Aaa/AAA 1,112,150
1,750,000 Lehigh County, PA Industrial Development Authority Pollution Control Rev.
(Pennsylvania Power & Light Company Project), 6.40% due 11/1/2021................. Aaa/AAA 1,820,123
500,000 Montgomery County, PA Industrial Development Authority Pollution Control Rev.
(Philadelphia Electric Co.), 7.60% due 4/1/2021*.................................. Baa2/BBB+ 538,775
2,000,000 Pennsylvania Higher Education Assistance Agency Student Loan Rev.,
6.40% due 3/1/2022*............................................................... Aaa/AAA 1,997,360
2,000,000 Pennsylvania Higher Educational Facilities Authority Rev. (Temple University),
6-1/2% due 4/1/2021............................................................. Aaa/AAA 2,134,180
2,000,000 Pennsylvania Housing Finance Agency (Single Family Mortgage Rev.),
5.45% due 10/1/2017............................................................... Aa/AA+ 1,877,240
1,800,000 Pennsylvania Housing Finance Agency (Rental Housing Rev.), 6-1/2% due 7/1/2023 ... Aaa/AAA 1,864,818
2,000,000 Pennsylvania State G.O.'s, 6-1/2% due 11/15/2011.................................. A1/AA- 2,143,720
1,500,000 Pennsylvania State Turnpike Commission Rev., 6% due 12/1/2017....................... Aaa/AAA 1,507,905
2,500,000 Philadelphia Hospitals & Higher Educational Facilities Authority, PA Hospital Rev.
(Children's Hospital of Philadelphia Project), 5% due 2/15/2021................... Aa/AA 2,164,425
1,500,000 Philadelphia, PA Airport Rev., 6.10% due 6/15/2025*................................. Aaa/AAA 1,501,035
1,000,000 Philadelphia, PA Gas Works Rev., 7% due 5/15/2020................................... Aaa/AAA 1,166,730
450,000 Philadelphia Redevelopment Authority, PA (Home Mortgage Rev.), 9% due 6/1/2017 ..... NR/AA 470,016
1,500,000 Pittsburgh, PA Water & Sewer Authority Rev., 5.65% due 9/1/2025..................... Aaa/AAA 1,451,910
2,000,000 Pottsville Hospital Authority, PA Hospital Rev. (Daughters of Charity National
Health System--Good Samaritan Regional Medical Center), 5% due 8/15/2012.......... Aa/AA 1,798,900
1,500,000 University of Pittsburgh Capital Project, 6-1/8% due 6/1/2021....................... Aaa/AAA 1,532,205
-----------
Total Municipal Bonds (Cost $31,714,505)--98.2% .......................................................... 32,719,877
-----------
Variable Rate Demand Notes (Cost $200,000)--0.6%.......................................................... 200,000
Other Assets Less Liabilities--1.2%....................................................................... 390,756
-----------
NET ASSETS--100.0%........................................................................................ $33,310,633
===========
</TABLE>
----------
* Interest income earned from this security is subject to the federal
alternative minimum tax.
+ Ratings have not been audited by Deloitte & Touche LLP.
See notes to financial statements.
3
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES. March 31, 1996
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value:
Long-term holdings (cost $31,714,505)..................................... $32,719,877
Short-term holdings (cost $200,000)....................................... 200,000 $32,919,877
-----------
Cash......................................................................... 55,059
Interest receivable.......................................................... 601,540
Receivable for Shares of Beneficial Interest sold............................ 9,526
Expenses prepaid to shareholder service agent................................ 2,571
-----------
Total Assets................................................................. 33,588,573
-----------
LIABILITIES:
Payable for Shares of Beneficial Interest repurchased........................ 116,994
Dividends payable............................................................ 62,273
Accrued expenses, taxes, and other........................................... 98,673
-----------
Total Liabilities............................................................ 277,940
-----------
Net Assets................................................................... $33,310,633
===========
COMPOSITION OF NET ASSETS:
Shares of Beneficial Interest, at par ($.001 par value; unlimited shares
authorized; 4,301,822 shares outstanding):
Class A................................................................... $ 4,185
Class D................................................................... 117
Additional paid-in capital................................................... 32,303,518
Distributions in excess of net realized gain................................. (2,559)
Net unrealized appreciation of investments................................... 1,005,372
-----------
Net Assets................................................................... $33,310,633
===========
NET ASSET VALUE PER SHARE:
Class A ($32,407,874 / 4,185,161 shares).................................. $7.74
=====
Class D ($902,759 / 116,661 shares)....................................... $7.74
=====
</TABLE>
See notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
STATEMENT OF OPERATIONS For the six months ended March 31, 1996
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................................. $1,007,975
EXPENSES:
Management fee............................................................ $ 86,159
Distribution and service fees............................................. 43,506
Shareholder account services.............................................. 21,681
Auditing and legal fees................................................... 17,120
Trustees' fees and expenses............................................... 11,674
Custody and related services.............................................. 11,365
Shareholder reports and communications.................................... 5,265
Registration.............................................................. 2,420
Miscellaneous............................................................. 2,445
---------
Total expenses............................................................ 201,635
---------
Net investment income..................................................... 806,340
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments.......................................... --
Net change in unrealized appreciation of investments...................... 206,020
---------
Net gain on investments................................................... 206,020
----------
Increase in net assets from operations.................................... $1,012,360
==========
</TABLE>
----------
See notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
----------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
3/31/96 9/30/95
------------ -----------
<S> <C> <C>
OPERATIONS:
Net investment income................................................................ $ 806,340 $ 1,701,722
Net realized gain on investments..................................................... -- 402,850
Net change in unrealized appreciation/depreciation of investments.................... 206,020 1,230,484
----------- -----------
Increase in net assets from operations............................................... 1,012,360 3,335,056
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A........................................................................... (788,144) (1,694,167)
Class D........................................................................... (18,196) (7,555)
Net realized gain on investments:
Class A............................................................................ (395,780) (600,438)
Class D............................................................................ (5,886) (820)
----------- -----------
Decrease in net assets from distributions............................................ (1,208,006) (2,302,980)
---------- -----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------
SIX MONTHS YEAR
ENDED ENDED
3/31/96 9/30/95
--------- -------
<S> <C> <C> <C> <C>
TRANSACTIONS IN SHARES
OF BENEFICIAL INTEREST:
Net proceeds from sales of shares:
Class A........................................... 55,478 106,330 439,318 804,851
Class D........................................... 93,174 49,571 733,077 382,449
Shares issued in payment of dividends:
Class A........................................... 51,853 121,691 409,770 917,938
Class D........................................... 1,095 706 8,656 5,454
Exchanged from associated Funds:
Class A............................................ 43,074 31,638 340,520 235,025
Class D............................................ 12,819 1,759 102,336 13,441
Shares issued in payment of gain distributions:
Class A........................................... 33,940 59,014 266,766 406,603
Class D........................................... 644 72 5,117 498
------- ------- ----------- -----------
Total................................................ 292,077 370,781 2,305,560 2,766,259
------- ------- ----------- -----------
Cost of shares repurchased:
Class A........................................... (224,649) (656,287) (1,775,182) (4,898,866)
Class D........................................... (31,049) (3,075) (242,191) (23,950)
Exchanged into associated Funds:
Class A........................................... (43,164) (24,434) (340,755) (184,951)
Class D........................................... (14,765) -- (117,821) --
------- ------- ----------- -----------
Total................................................ (313,627) (683,796) (2,475,949) (5,107,767)
------- ------- ----------- -----------
Decrease in net assets from transactions
in Shares of Beneficial Interest.................. (21,550) (313,015) (170,389) (2,341,508)
======= ======== ----------- -----------
Decrease in net assets............................................................... (366,035) (1,309,432)
NET ASSETS:
Beginning of period.................................................................. 33,676,668 34,986,100
----------- -----------
End of period........................................................................ $33,310,633 $33,676,668
=========== ===========
</TABLE>
See notes to financial statements.
6
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. Seligman Pennsylvania Tax-Exempt Fund (the "Fund") offers two classes of
shares. All shares existing prior to February 1, 1994 were classified as Class A
shares. Class A shares are sold with an initial sales charge of up to 4.75% and
a continuing service fee of up to 0.25% on an annual basis. Class D shares are
sold without an initial sales charge but are subject to a distribution fee of up
to 0.75% and a service fee of up to 0.25% on an annual basis, and a contingent
deferred sales load ("CDSL") of 1% imposed on certain redemptions made within
one year of purchase. The two classes of shares represent interests in the same
portfolio of investments, have the same rights and are generally identical in
all respects except that each class bears its separate distribution and certain
class expenses and has exclusive voting rights with respect to any matter to
which a separate vote of any class is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. All tax-exempt securities and other short-term holdings maturing in more than
60 days are valued based upon quotations provided by an independent pricing
service or, in their absence, at fair value determined in accordance with
procedures adopted by the Trustees. Short-term holdings maturing in 60 days
or less are generally valued at amortized cost.
b. There is no provision for federal income or excise tax. The Fund has elected
to be taxed as a regulated investment company and intends to distribute
substantially all taxable net income and net gain realized. Dividends are
declared daily and paid monthly.
c. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income tax
purposes. Interest income is recorded on the accrual basis. The Fund
amortizes original issue discounts and premiums paid on purchases of
portfolio securities. Discounts other than original issue discounts are not
amortized.
d. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares based
upon the relative value of each class. Class-specific expenses, which include
distribution and service fees and any other items that are specifically
attributed to a particular class, are charged directly to such class. For the
six months ended March 31, 1996, distribution and service fees were the only
class-specific expenses.
e. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized gains may differ from
their ultimate treatment for federal income tax purposes. These differences
are caused primarily by differences in the timing of the recognition of
certain components of income, expense, and capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassifications
will have no effect on net assets, results of operations, or net asset value
per share of the Fund.
3. There were no purchases and sales of portfolio securities, other than
short-term investments, for the six months ended March 31, 1996.
At March 31, 1996, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of investments amounted
to $1,366,482 and $361,110, respectively.
4. J. & W. Seligman & Co. Incorporated (the"Manager") manages the affairs of the
Fund and provides the necessary personnel and facilities. Compensation of all
officers of the Fund, all trustees of the Fund who are employees or consultants
of the Manager, and all personnel of the Fund and the Manager is paid by the
Manager. The Manager's fee, calculated daily and payable monthly, is equal to
0.50% per annum of the Fund's average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $2,174 from the sale of Class A shares, after commissions of
$16,651 paid to dealers.
7
<PAGE>
================================================================================
The Fund has an Administration, Shareholder Services and Distribution Plan (the
"Plan") with respect to Class A shares under which service organizations can
enter into agreements with the Distributor and receive a continuing fee of up to
0.25% on an annual basis, payable quarterly, of the average daily net assets of
the Class A shares attributable to the particular service organizations for
providing personal services and/or the maintenance of shareholder accounts. The
Distributor charges such fees to the Fund pursuant to the Plan. For the six
months ended March 31, 1996, fees paid aggregated $38,872, or 0.23% per annum of
the average daily net assets of Class A shares.
The Fund has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible, and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Fund
to the Distributor pursuant to the Plan. For the six months ended March 31,
1996, fees paid amounted to $4,634, or 1% per annum of the average daily net
assets of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain redemptions
of Class D shares occurring within one year of purchase. For the six months
ended March 31, 1996, such charges amounted to $2,333.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of fund shares, as well as distribution and
service fees pursuant to the Plan. For the six months ended March 31, 1996,
Seligman Services, Inc. received commissions of $295 from sales of shares of the
Fund. Seligman Services, Inc. also received distribution and service fees of
$1,877, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost $21,681 for shareholder account services.
Certain officers and trustees of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
Fees of $4,000 were incurred by the Fund for the legal services of Sullivan &
Cromwell, a member of which firm is a trustee of the Fund.
The Fund has a compensation arrangement under which trustees who receive fees
may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The cost of such fees and interest is included in trustees' fees and
expenses, and the accumulated balance thereof at March 31, 1996, of $40,024 is
included in other liabilities. Deferred fees and related accrued interest are
not deductible for federal income tax purposes until such amounts are paid.
8
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item as disclosed in the financial statements
to their equivalent per share amounts using average shares outstanding.
The total return based on net asset value measures the Fund's performance
assuming investors purchased fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
returns for the period of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
----------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30 SIX MONTHS YEAR 2/1/94*
ENDED --------------------------------------- ENDED ENDED TO
3/31/96 1995 1994 1993 1992 1991 3/31/96 9/30/95 9/30/94
------- ----- ---- ---- ---- ---- -------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................... $7.79 $7.55 $8.61 $8.02 $7.74 $7.34 $7.78 $7.54 $8.37
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income**.......... .19 .38 .39 .42 .46 .47 .16 .31 .22
Net realized and unrealized
investment gain (loss)........ .04 .37 (.80) .71 .30 .49 .05 .37 (.83)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (decrease) from
investment operations......... .23 .75 (.41) 1.13 .76 .96 .21 .68 (.61)
Dividends paid or declared ...... (.19) (.38) (.39) (.42) (.46) (.47) (.16) (.31) (.22)
Distributions from
net gain realized............. (.09) (.13) (.26) (.12) (.02) (.09) (.09) (.13) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net increase (decrease) in
net asset value............... (.05) .24 (1.06) .59 .28 .40 (.04) (.24) (.83)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period... $7.74 $7.79 $7.55 $8.61 $8.02 $7.74 $7.74 $7.78 $7.54
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON
NET ASSET VALUE............... 2.90% 10.55% (5.00)% 14.71% 10.04% 13.40% 2.64% 9.53% (7.50)%
RATIOS/SUPPLEMENTAL
DATA:**
Expenses to average net assets... 1.15%+ 1.21% 1.16% 1.19% 1.01% .98% 1.92%+ 2.23% 2.00%+
Net investment income to
average net assets............ 4.70%+ 5.05% 4.91% 5.14% 5.79% 6.16% 3.93%+ 4.10% 4.20%+
Portfolio turnover............... -- 11.78% 7.71% 40.74% 32.87% 25.24% -- 11.78% 7.71%++
Net assets, end of period
(000's omitted) .............. $32,408 $33,251 $34,943 $41,296 $39,431 $37,853 $903 $426 $43
</TABLE>
----------
* Commencement of offering of Class D shares.
** Had the Manager, at its discretion, not waived a portion of its fees for
the fiscal years ended 9/30/92 and 9/30/91, the net investment income per
share would have been $.45 and $.45, respectively. The ratios of expenses
to average net assets and of net investment income to average net assets
for the same periods would have been 1.16% and 1.23%; and 5.64% and 5.91%,
respectively.
+ Annualized.
++ For the year ended September 30, 1994.
See notes to financial statements.
9
<PAGE>
================================================================================
Report of Independent Auditors
--------------------------------------------------------------------------------
The Trustees and Shareholders,
Seligman Pennsylvania Tax-Exempt Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Pennsylvania Tax-Exempt Fund as of
March 31, 1996, the related statements of operations for the six months then
ended and of changes in net assets for the six months then ended and for the
year ended September 30, 1995, and the financial highlights for each of the
periods presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1996 by correspondence with the Fund's custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman
Pennsylvania Tax-Exempt Fund as of March 31, 1996, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
New York, New York
May 3, 1996
10
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
TRUSTEES
---------------------------------------------------------------------------------------------
<S> <C>
Fred E. Brown James C. Pitney 3
Director and Consultant, Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
J. & W. Seligman & Co. Incorporated Director, Public Service Enterprise Group
John R. Galvin 2 James Q. Riordan 3
Dean, Fletcher School of Law and Diplomacy Director, The Brooklyn Union Gas Company
at Tufts University Trustee, Committee for Economic Development
Director, USLIFE Corporation Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
Alice S. Ilchman 3
President, Sarah Lawrence College Ronald T. Schroeder 1
Trustee, Committee for Economic Development Managing Director,
Director, NYNEX J. & W. Seligman & Co. Incorporated
Chairman, The Rockefeller Foundation
Robert L. Shafer 3
Frank A. McPherson 2 Vice President, Pfizer Inc.
Chairman and CEO, Kerr-McGee Corporation Director, USLIFE Corporation
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center James N. Whitson 2
Executive Vice President and Director,
John E. Merow Sammons Enterprises, Inc.
Partner, Sullivan & Cromwell, Law Firm Director, C-SPAN
Director, Commonwealth Aluminum Corporation Director, Red Man Pipe and Supply Company
Betsy S. Michel 2 Brian T. Zino 1
Director or Trustee, President
Various Organizations Managing Director,
J. & W. Seligman & Co. Incorporated
William C. Morris 1 ---------
Chairman Member:
Chairman of the Board and President, 1 Executive Committee
J. & W. Seligman & Co. Incorporated 2 Audit Committee
Chairman, Carbo Ceramics Inc. 3 Trustee Nominating Committee
Director, Kerr-McGee Corporation
</TABLE>
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EXECUTIVE OFFICERS
William C. Morris Thomas G. Moles Thomas G. Rose
Vice President Vice President Treasurer
Chairman
Brian T. Zino Lawerence P. Vogel Frank J. Nasta
President Vice President Secretary
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<S> <C> <C>
Manager General Distributor Important Telephone Numbers
J. & W. Seligman & Co. Seligman Financial Services, Inc. (800) 221-2450 Shareholder
Incorporated 100 Park Avenue Services
100 Park Avenue New York, NY 10017
New York, NY 10017 (800) 622-4597 24-Hour Automated
Shareholder Service Agent Telephone Access
General Counsel Seligman Data Corp. Service
Sullivan & Cromwell 100 Park Avenue
New York, NY 10017
Independent Auditors
Deloitte & Touche LLP
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11
<PAGE>
================================================================================
MID-YEAR REPORT
--------------------
SELIGMAN
PENNSYLVANIA
TAX-TXMPT
FUND
--------------------
March 31, 1996
SELIGMAN FINANCIAL SERVICES, INC
an affiliate of
[GRAPHIC OMITTED]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Beneficial Interest of
Seligman Pennsylvania Tax-Exempt Fund, which contains information about the
sales charges, management fee, and other costs. Please read the prospectus
carefully before investing or sending money.
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Providing Tax-Free Income
Since 1986
TEDPA3 3/96
