SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES, N-30D, 1997-05-28

SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES
N-30D, 1997-05-28

Previous: UNICOMP INC, S-3, 1997-05-28

Next: EQUIPMENT LEASING CORPORATION OF AMERICA, 10-K405/A, 1997-05-28

SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[LOGO]
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 Municipal Fund, which contains information about the sales
charges, management fee, and other costs. Please read the prospectus carefully
before investing or sending money.

TEDPA3 3/97

- --------------------------------------------------------------------------------
MID-YEAR REPORT

--------------------------------------
SELIGMAN
PENNSYLVANIA
MUNICIPAL
FUND
--------------------------------------

March 31, 1997

[LOGO]
- --------------------------------------------------------------------------------
Providing Income
Free From Regular Income Tax
Since 1986

During the last six months, the economy continued its expansion without
provoking a significant increase in inflationary pressures. Nonetheless, on
March 25, the Fed increased the fed funds rate -- the interest rate charged for
interbank loans -- from 5.25% to 5.50%, due to concerns that strong consumer
demand could be enough to fuel higher levels of inflation in the near future.

The near-term result of the Fed's action has been an increase in the yields
of fixed-income securities, regardless of maturities. The Bond Buyer 20-Bond
General Obligation Index, a benchmark for the municipal market, moved slightly
higher over the course of the period, from 5.76% on September 30, 1996, to 5.81%
on March 31, 1997.

The current uncertainty about the direction of the economy has caused bearish
sentiment in the municipal bond market, and market participants remain alert for
any signs of a resurgence in inflation, which could prompt another Fed move.
Nevertheless, municipal securities continue to outperform other fixed-income
investments.

The financial markets may remain unsettled in the short term until the effect
of the Fed's action on the economy becomes clearer. However, economic
fundamentals remain encouraging, and we believe that the municipal bond market
will stabilize over time, while continuing to provide investors with attractive
taxable-equivalent yields.

On a final note, we have regretfully accepted Fred E. Brown's decision to
formally retire from the Fund's Board of Trustees. Mr. Brown has been elected
Trustee Emeritus of the Board, and Seligman Pennsylvania Municipal Fund will
still be able to benefit from his invaluable advice and counsel. Mr. Brown, who
was Chairman and CEO of J. & W. Seligman & Co. from 1965 to 1988, and Chairman
of the Board of your Fund from 1986 to 1988, has served with unparalleled
dedication for nearly 60 years.

A discussion with your Portfolio Manager, portfolio holdings, and financial
statements follow this letter.

We thank you for your continued interest in Seligman Pennsylvania Municipal
Fund, and look forward to serving your investment needs in the many years to
come.

By order of the Trustees,

/s/ William C. Morris
- ---------------------

William C. Morris
Chairman

/s/ Brian T. Zino
-----------------

Brian T. Zino
President

May 2, 1997

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SELIGMAN PENNSYLVANIA MUNICIPAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT RESULTS March 31, 1997 CLASS A CLASS D
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS (in millions) $29.7 $0.8
- ---------------------------------------------------------------------------------------------------------
YIELD* 4.41% 3.84%
- ---------------------------------------------------------------------------------------------------------
DIVIDENDS** $0.181 $0.151
- ---------------------------------------------------------------------------------------------------------
CAPITAL GAIN DISTRIBUTION** $0.096 $0.096
- ---------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
One Year
With sales charge/CDSL(1) (0.07)% 3.16%
Without sales charge/CDSL(2) 4.96 4.15
Five Years
With sales charge(1) 5.69 n/a
Without sales charge(2) 6.74 n/a
Ten Years or Since Inception 2/1/94
With sales charge(1) 6.33 n/a
Without sales charge/CDSL(2) 6.86 2.55
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
March 31, 1997 $7.65 $7.65
September 30, 1996 7.82 7.81
- ---------------------------------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE
March 31, 1997 $8.03 $7.65
September 30, 1996 8.21 7.81
- ---------------------------------------------------------------------------------------------------------
MOODY'S/S&P RATINGS+
Aaa/AAA 71%
Aa/AA 20
A/A 7
Baa/BBB 2
- ---------------------------------------------------------------------------------------------------------
HOLDINGS BY MARKET SECTOR+
Revenue Bonds 88%
General Obligation Bonds 12
- ---------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE MATURITY (Years) 22.4
- ---------------------------------------------------------------------------------------------------------
<FN>
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on differences in sales charges and
fees paid by shareholders.

* Current yield represents the annualized yield for the 30-day period ended March 31, 1997.
** Represents per share amount paid or declared for the six months ended March 31, 1997.
(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 invested in additional shares; also reflects the effect of the 4.75%
maximum initial sales charge or the 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 the
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 may be subject to applicable state and local taxes, and any amount may be subject to the federal alternative
minimum tax. Past performance is not indicative of future investment results.
</TABLE>

2
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTERVIEW WITH YOUR PORTFOLIO MANAGER, THOMAS G. MOLES
- --------------------------------------------------------------------------------
[PICTURE OMITTED]

Seligman Municipals Team: (from left) Audrey Kuchtyak,
Theresa Barion, Debra McGuinness, (seated) Eileen Comerford, Thomas G. Moles
(Portfolio Manager)

What economic and market factors affected Seligman Pennsylvania Municipal Fund
in the past six months?

"For most of 1996 and up to the present, the municipal bond market has
outperformed other fixed-income markets, due largely to an imbalance in supply
and demand. Heavy bond calls and redemp tions resulted in a decrease in the out
standing municipal bond supply, while positive municipal fundamentals led to a
modest improvement in investor demand. During the month of March, however,
long-term municipal yields began to rise due to an increase in economic growth
and the Federal Reserve Board's resulting attempt to contain it by raising the
federal funds rate. Overall, the higher-yield environment caused a modest
decline in the Fund's net asset value in the first quarter of 1997. Nonetheless,
the con tinued health of the US economy has helped improve the financial status
of many municipal issuers, including issues held by the Fund. If the economy
remains on track, this trend could continue."

What was your investment strategy?

"During the past six months, our outlook for the municipal market remained
positive. Investment strategy was based on the assumption that long-term yields
would continue to fluctuate within a narrow range. In this environment, the
Fund's performance was primarily due to coupon income rather than price
appreciation. Therefore, portfolio purchases were concentrated in current coupon
bonds, in an effort to maximize coupon returns in the expected absence of price
appreciation.
"We believe that the rise in yields seen in March will be short-lived, and we
view the current market environment as a buying opportunity. We have been
committing cash, where appropriate, to the purchase of longer-term, quality
municipal bonds. While rising interest rates generally have a negative impact on
municipal bond prices and on the Fund's performance, opportunities to enhance
returns exist in all markets. Through active professional management, we are
able to identify undervalued or improving situations that can benefit the
portfolio, regardless of the direction of interest rates."

What is your outlook?

"The fixed-income markets may remain unsettled in the near term until investors
become satisfied that the Fed has achieved its objectives. Ultimately, we
anticipate that confidence in the market will be restored, and that long-term
municipal yields will settle back into a narrow trading range. Additionally,
new issue volume in the municipal market is not expected to vary significantly
from last year, and this predictable supply of bonds should add stability to the
marketplace. We are confident that Seligman Pennsylvania Municipal Fund will
continue to play an important role in helping investors meet their long-term
financial goals."

3
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

FACE RATINGS MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P+ VALUE
- ---------- ---------------------- ------------ ----------
<S> <C> <C>
$1,000,000 Berks County Municipal Authority, PA Hospital Rev. (The Reading Hospital &
Medical Center Project), 5.70% due 10/1/2014................................ Aaa/AAA $996,060
1,000,000 Berks County Municipal Authority, PA Hospital Rev. (The Reading Hospital &
Medical Center Project), 6.10% due 10/1/2023................................ Aaa/AAA 1,002,860
1,000,000 Delaware County Authority, PA (Haverford College Rev.), 5 1/2% due 11/15/2023. Aaa/AAA 936,380
1,000,000 Delaware County Industrial Development Authority, PA (Philadelphia Suburban
Water Company), 6.35% due 8/15/2025*........................................ Aaa/AAA 1,025,870
780,000 Delaware County, PA GOs, 6% due 11/15/2022.................................... NR/NR 823,633
220,000 Delaware County, PA GOs, 6% due 11/15/2022.................................... Aa/AA 221,963
1,000,000 Franklin County, PA Industrial Development Authority Hospital Rev.
(The Chambersburg Hospital Project), 6 1/4% due 7/1/2022.................... Aaa/AAA 1,026,810
1,500,000 Lehigh County, PA Industrial Development Authority Pollution Control Rev.
(Pennsylvania Power & Light Company Project), 6.15% due 8/1/2029............ Aaa/AAA 1,521,600
500,000 Montgomery County, PA Industrial Development Authority Pollution Control
Rev. (Philadelphia Electric Co.), 7.60% due 4/1/2021*....................... Baa2/BBB+ 533,620
2,000,000 Pennsylvania Higher Education Assistance Agency Student Loan Rev.,
6.40% due 3/1/2022*......................................................... Aaa/AAA 2,034,040
1,500,000 Pennsylvania Higher Educational Facilities Authority College & University Rev.
(University of Pennsylvania), 5.90% due 9/1/2014............................ Aa2/AA 1,507,815
2,000,000 Pennsylvania Higher Educational Facilities Authority Rev. (Temple University),
6 1/2% due 4/1/2021......................................................... Aaa/AAA 2,121,660
1,500,000 Pennsylvania Housing Finance Agency (Single Family Mortgage Rev.),
5.45% due 10/1/2017......................................................... Aa2/AA+ 1,427,175
1,500,000 Pennsylvania Housing Finance Agency (Rental Housing Rev.), 6 1/2% due 7/1/2023 Aaa/AAA 1,538,970
1,500,000 Pennsylvania Intergovernmental Co-Op Authority Special Tax Rev. (Philadelphia
Funding Program), 5 1/2% due 6/15/2016...................................... Aaa/AAA 1,448,145
2,000,000 Pennsylvania State GOs, 6 1/2% due 11/15/2011................................. A1/AA- 2,166,000
1,500,000 Pennsylvania State Turnpike Commission Rev., 6% due 12/1/2017................. Aaa/AAA 1,510,830
1,500,000 Philadelphia, PA Airport Rev., 6.10% due 6/15/2025*........................... Aaa/AAA 1,499,835
1,000,000 Philadelphia, PA Parking Authority Airport Parking Rev., 5 1/2% due 9/1/2018.. Aaa/AAA 957,520
450,000 Philadelphia Redevelopment Authority, PA (Home Mortgage Rev.), 9% due 6/1/2017 NR/AA 470,547
1,500,000 Pittsburgh, PA Water & Sewer Authority Rev., 5.65% due 9/1/2025............... Aaa/AAA 1,442,550
1,500,000 Pottsville Hospital Authority, PA Hospital Rev. (Daughters of Charity National
Health System-- Good Samaritan Regional Medical Center), 5% due 8/15/2012 Aa2/AA 1,380,345
1,500,000 University of Pittsburgh Capital Project, 6 1/8% due 6/1/2021................. Aaa/AAA 1,514,985
-----------
Total Municipal Bonds (Cost $28,500,865)-- 95.6% ..................................................... 29,109,213
Variable Rate Demand Notes (Cost $800,000)-- 2.6%..................................................... 800,000
Other Assets Less Liabilities-- 1.8%.................................................................. 535,049
-----------
NET ASSETS-- 100.0%................................................................................... $30,444,262
===========
<FN>
- -----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal alternative minimum tax.
See Notes to Financial Statements.
</TABLE>
4

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments, at value:
Long-term holdings (cost $28,500,865)..................................... $29,109,213
Short-term holdings (cost $800,000)....................................... 800,000 $ 29,909,213
-----------
Cash......................................................................... 229,941
Interest receivable.......................................................... 512,304
Receivable for Shares of Beneficial Interest sold............................ 34,747
Expenses prepaid to shareholder service agent ............................... 4,756
Other ....................................................................... 7,227
-----------
Total Assets ................................................................ 30,698,188
-----------
LIABILITIES:
Payable for Shares of Beneficial Interest repurchased........................ 104,784
Dividends payable............................................................ 56,109
Accrued expenses, taxes, and other........................................... 93,033
-----------
Total Liabilities............................................................ 253,926
-----------
Net Assets................................................................... $30,444,262
===========
COMPOSITION OF NET ASSETS:
Shares of Beneficial Interest, at par ($.001 par value; unlimited shares
authorized; 3,976,619 shares outstanding):
Class A................................................................... $ 3,878
Class D................................................................... 99
Additional paid-in capital................................................... 29,799,494
Undistributed net realized gain.............................................. 32,443
Net unrealized appreciation of investments................................... 608,348
-----------
Net Assets................................................................... $30,444,262
===========
NET ASSET VALUE PER SHARE:
Class A ($29,687,084 / 3,877,652 shares)..................................... $7.65
=====
Class D ($757,178 / 98,967 shares)........................................... $7.65
=====
<FN>
- ------------------------
See Notes to Financial Statements.
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Six Months Ended March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest..................................................................... $919,257

EXPENSES:
Management fee............................................................... $ 78,506
Distribution and service fees................................................ 36,955
Shareholder account services................................................. 24,032
Auditing and legal fees...................................................... 16,472
Trustees' fees and expenses.................................................. 12,280
Shareholder reports and communications....................................... 4,755
Registration................................................................. 4,608
Custody and related services................................................. 4,367
Shareholders' meeting........................................................ 4,036
Miscellaneous................................................................ 1,787
--------
Total Expenses............................................................... 187,798
--------
Net Investment Income........................................................ 731,459

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments............................................. 36,502
Net change in unrealized appreciation of investments......................... (297,528)
--------
Net Loss on Investments...................................................... (261,026)
--------
Increase in Net Assets from Operations....................................... $470,433
========
<FN>
- ----------------------
See Notes to Financial Statements.
</TABLE>
6

<TABLE>
<CAPTION>
SHARES
---------------------------
SIX MONTHS YEAR
TRANSACTIONS IN SHARES ENDED ENDED
OF BENEFICIAL INTEREST: 3/31/97 9/30/96
-------- -------
<S> <C> <C> <C> <C>
Net proceeds from sales of shares:
Class A........................................... 58,916 88,034 458,518 689,856
Class D........................................... 5,833 98,385 45,000 773,322
Shares issued in payment of dividends:
Class A........................................... 46,767 104,328 363,648 814,679
Class D........................................... 1,248 2,293 9,709 17,887
Exchanged from associated Funds:
Class A........................................... 31,483 50,822 244,785 400,478
Class D........................................... 213 12,819 1,658 102,336
Shares issued in payment of gain distributions:
Class A........................................... 33,111 33,940 258,269 266,766
Class D........................................... 698 644 5,445 5,117
-------- -------- ----------- -----------
Total................................................ 178,269 391,265 1,387,032 3,070,441
-------- -------- ----------- -----------
Cost of shares repurchased:
Class A........................................... (257,066) (476,571) (1,997,490) (3,712,004)
Class D........................................... (21,218) (40,966) (164,596) (318,471)
Exchanged into associated Funds:
Class A........................................... (18,710) (86,031) (145,620) (668,822)
Class D........................................... -- (15,725) -- (125,209)
-------- -------- ----------- -----------
Total................................................ (296,994) (619,293) (2,307,706) (4,824,506)
-------- -------- ----------- -----------
Decrease in net assets from transactions
in Shares of Beneficial Interest (118,725) (228,028) (920,674) (1,754,065)
======== ======== =========== ===========
Decrease in net assets............................................................... (1,571,109) (1,661,297)
NET ASSETS:
Beginning of period.................................................................. 32,015,371 33,676,668
----------- -----------
End of period....................................................................... $30,444,262 $32,015,371
=========== ===========
<FN>
- -------------------------
See Notes to Financial Statements.

</TABLE>
7
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Pennsylvania Municipal Fund (the "Fund") offers two classes of
shares. All shares existing prior to February 1, 1994, the commencement date of
Class D shares, 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 A shares purchased in an amount of $1,000,000 or
more are sold without an initial sales charge but are subject to a contingent
deferred sales load ("CDSL") of 1% on redemptions within eighteen months of
purchase. 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 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
other class expenses, and has exclusive voting rights with respect to any matter
on which a separate vote of any class is required.

2. The financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make certain
estimates and assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the Fund:

a. All municipal 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 tax. The Fund has elected to be
taxed as a regulated investment company and intends to distribute sub-
stantially 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 premi ums 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
attributable to a particular class, are charged directly to such class. For
the six months ended March 31, 1997, 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 realized 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. Purchases and sales of portfolio securities excluding short-term investments,
for the six months ended March 31, 1997, amounted to $4,263,608 and $5,559,053,
respectively.

At March 31, 1997, 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 $884,803 and $276,455, 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.

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares, and an affiliate of the Manager, received
concessions of $2,293 from the sale of Class A shares, after commissions of
$16,715 paid to dealers.

The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, 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,
1997, fees paid aggregated $32,837, or 0.21% per annum of the average daily net
assets of Class A shares.

Under the Plan, with respect to Class D shares, 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, 1997, fees paid amounted to
$4,118, 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, 1997, such charges amounted to $32.

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, 1997,
Seligman Services, Inc. received commissions of $247 from sales of shares of
the Fund. Seligman Services, Inc. also received distribution and service fees of
$1,665, pursuant to the Plan.

Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost $24,032 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 retired 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, 1997, of $46,131 is
included in other liabilities. Deferred fees and related accrued interest are
not deductible for federal income tax purposes until such amounts are paid.

9
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, 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.
"Total return based on net asset value" measures each Class's performance but
assumes that investors purchased Fund shares at net asset value as of the
beginning of the period, invested dividends and capital gains paid at net asset
value, and then sold their shares at the net asset value 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
periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
------------------------------------------------- --------------------------------
SIX SIX
MONTHS MONTHS YEAR ENDED 2/1/94*
ENDED YEAR ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, TO
---------------------------------------- -------------
3/31/97 1996 1995 1994 1993 1992 3/31/97 1996 1995 9/30/94
-------- ----- ----- ----- ----- ----- -------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period.................. $7.82 $7.79 $7.55 $8.61 $8.02 $7.74 $7.81 $7.78 $7.54 $8.37
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income** ...... .18 .38 .38 .39 .42 .46 .15 .32 .31 .22
Net realized and unrealized
investment gain (loss) .... (.07) .12 .37 (.80) .71 .30 (.06) .12 .37 (.83)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (decrease) from
investment operations ..... .11 .50 .75 (.41) 1.13 .76 .09 .44 .68 (.61)
Dividends paid or declared ... (.18) (.38) (.38) (.39) (.42) (.46) (.15) (.32) (.31) (.22)
Distributions from
net gain realized ......... (.10) (.09) (.13) (.26) (.12) (.02) (.10) (.09) (.13) --
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net increase (decrease) in
net asset value............ (.17) .03 .24 (1.06) .59 .28 (.16) .03 .24 (.83)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period $7.65 $7.82 $7.79 $7.55 $8.61 $8.02 $7.65 $7.81 $7.78 $7.54
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON
NET ASSET VALUE ........... 1.35% 6.57% 10.55% (5.00)% 14.71% 10.04% 1.09% 5.76% 9.53% (7.50)%
RATIOS/SUPPLEMENTAL
DATA:**
Expenses to average net assets 1.17%+ 1.11% 1.21% 1.16% 1.19% 1.01% 1.96%+ 1.88% 2.23% 2.00%+
Net investment income to
average net assets ........ 4.67%+ 4.82% 5.05% 4.91% 5.14% 5.79% 3.88%+ 4.05% 4.10% 4.20%+
Portfolio turnover ........... 13.91% 4.56% 11.78% 7.71% 40.74% 32.87% 13.91% 4.56% 11.78% 7.71%++
Net assets, end of period
(000s omitted) ............ $29,687 $31,139 $33,251 $34,943 $41,296 $39,431 $757 $876 $426 $43

<FN>
- -----------------------
* Commencement of offering of Class D shares.
** Had the Manager, at its discretion, not waived a portion of its fees for the
fiscal year ended 9/30/92, the net investment income per share would have been
$.45. The ratios of expenses to average net assets and of net investment income
to average net assets for the same period would have been 1.16% and 5.64%,
respectively.
+ Annualized.
++ For the year ended September 30, 1994.

See Notes to Financial Statements.

10
</TABLE>

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Pennsylvania Municipal Fund as of
March 31, 1997, 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, 1996, 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, 1997 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 Municipal Fund as of March 31, 1997, 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.

/S/Deloitte & Touche LLP
- ------------------------

DELOITTE & TOUCHE LLP
New York, New York
May 2, 1997

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES
- --------------------------------------------------------------------------------
Fred E. Brown
Trustee Emeritus
Director and Consultant,
J. & W. Seligman & Co. Incorporated

John R. Galvin 2
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, USLIFE Corporation

Alice S. Ilchman 3
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Director, NYNEX
Chairman, The Rockefeller Foundation

Frank A. McPherson 2
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center

John E. Merow
Retired Chairman and Senior Partner,
Sullivan & Cromwell, Law Firm
Director, Commonwealth Aluminum Corporation

Betsy S. Michel 2
Director or Trustee,
Various Organizations

William C. Morris 1
Chairman
Chairman of the Board,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Kerr-McGee Corporation

James C. Pitney 3
Retired Partner, Pitney, Hardin, Kipp & Szuch,
Law Firm
Director, Public Service Enterprise Group

James Q. Riordan 3
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service

Ronald T. Schroeder 1
Managing Director,
J. & W. Seligman & Co. Incorporated

Robert L. Shafer 3
Director or Trustee,
Various Organizations

James N. Whitson 2
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN
Director, Red Man Pipe and Supply Company

Brian T. Zino 1
President
President, J. & W. Seligman & Co. Incorporated
Chairman and President, Seligman Data Corp.

- ------------------------------------------
Member: 1 Executive Committee
2 Audit Committee
3 Trustee Nominating Committee

Brian T. Zino
President

Thomas G. Moles
Vice President

Lawrence P. Vogel
Vice President

Thomas G. Rose
Treasurer

Frank J. Nasta
Secretary

- --------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017

General Counsel
Sullivan & Cromwell

Independent Auditors
Deloitte & Touche LLP

General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017

Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017

Important Telephone Numbers
(800) 221-2450 Shareholder
Services
(800) 622-4597 24-Hour
Automated
Telephone Access
Service

13
<PAGE>

This page left blank intentionally.