- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Annual Report
New York Tax-Free Funds
- --------------------------------------------------------------------------------
February 28, 1999
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
* Municipal bonds were relatively unscathed by the turmoil in other
fixed income markets and were less volatile than Treasuries.
* The New York Tax-Free Money and Bond Funds outpaced their respective
Lipper benchmarks for both the 6- and 12-month periods. For the year
the funds returned 2.81% and 6.08%, respectively.
* The funds' good performances were due primarily to management
decisions and low fund expenses.
* Results benefited from the funds' longer relative maturities when
interest rates fell, and also from careful credit selection.
* We expect continued low inflation and slowing economic growth to
benefit municipal securities, which carry attractive yields relative
to other fixed income investments.
<PAGE>
================================================================================
FELLOW SHAREHOLDERS
- --------------------------------------------------------------------------------
Municipal markets and your funds generated good returns for the 6- and
12-month periods ended February 28, 1999. The funds exceeded their respective
benchmarks for both periods, a reflection of our management decisions and
below-average expenses.
Tax-exempt bonds moved through the past year relatively unscathed by the
turmoil that hit other fixed income markets. The municipal market was far less
volatile than the Treasury market, which benefited from a massive flight to
quality that drove 30-year yields to a record low of 4.72% from 5.92% last
February. Municipal yields also fell, but the decline was more muted. As a
result, municipal yields approached parity with Treasury yields in longer
maturities, an unusual event in a year when major tax reform was not under
discussion.
================================================================================
MARKET ENVIRONMENT
- --------------------------------------------------------------------------------
[edgar description: insert yield chart showing New York Index and New York
Money Index from 2/28/98 through 2/28/99; Source: T. Rowe Price Associates]
<PAGE>
Major economic developments here and overseas during the fiscal year
affected the fixed income markets. In the first half, many economists expected
the global turmoil to have a negative impact on the U.S. economy, causing
interest rates to fall. Russia's debt default last summer created havoc in many
markets, leading to a global liquidity crisis that contributed to the flight to
U.S. Treasuries. In response, the Federal Reserve cut short-term rates three
times last fall to cushion the domestic economy from weakness abroad and restore
investor confidence. In December, yields began to move up following signs of
stronger-than-expected U.S. growth and a growing sense that the global liquidity
crisis had abated. Robust GDP growth of 6.1% in the fourth quarter added fuel to
the fire, and 30-year Treasury yields were nearly 100 basis points (one
percentage point) higher at the end of February than in Octobe r. Municipal
yields also rose but, once again, they were far less volatile. Overall,
municipal yields did not change significantly during the past 12 months except
for money market rates, as can be seen in the chart on page 1. In the money
market area, solid cash flow and the lowest level of new issuance in nine years
led to lower yields. A steeper yield curve resulted as money market and
short-term bonds reacted to the Federal Reserve's rate cuts and also to strong
demand, while long-term rates were more affected by heavy supply. For the
calendar year, new bond issuance reached $284 billion, up 29% from 1997, a level
surpassed only in 1993.
The New York economy continues to show signs of improvement, especially in
the business and financial services sectors, contributing to the decline in the
unemployment rate to 5.2% versus 6.0% one year ago. As a result tax collections
grew, generating a surplus of $560 million for the fiscal year and eliminating
the state's deficit that had been accumulating since 1982. In his 1999 budget,
Governor Pataki affirmed his commitment to continued fiscal responsibility by
proposing spending restraint, debt reduction, and increased reserves.
Nonetheless, the state faces significant challenges including pressure to
increase spending on social services, possible revenue shortfall due to tax
cuts, and a high debt burden.
New York City benefited greatly from the strength of the U.S. economy and
its financial markets. For fiscal years 1998 and 1999, the City is expected to
post surpluses in excess of $1.5 billion. While times are very good, the source
of the gains can be quite cyclical.
<PAGE>
==================================================
RISK-ADJUSTED PERFORMANCE
- --------------------------------------------------
The bond fund was highly rated by
Morningstar[trademark] for its risk-adjusted
performance, which reflects the degree of
volatility experienced in earning a particular
return. (Money funds are not rated.) As of
February 28, 1999, the New York Tax-Free Bond Fund
received a Morningstar rating of four stars
overall. The top 10% of the funds in each
investment category receive five stars, the next
22.5% receive four stars, and the next 35% receive
three stars. The fund was rated among 1,576,
1,109, and 369 municipal fixed income funds for
the 3-, 5-, and 10-year periods ended February 28,
1999, respectively. Of course, past trends may not
continue.
Morningstar proprietary ratings reflect
historical risk-adjusted performance as of 2/28/99
and may change monthly. Ratings are calculated
from the fund's 3-, 5-, and 10-year average annual
returns in excess of 90-day Treasury bill returns
with appropriate fee adjustments and a risk factor
that reflects fund performance below 90-day
Treasury bill returns. The New York Tax-Free Bond
Fund received 4 stars for the 3- and 5-year
periods, and 3 stars for the 10-year period.
==================================================
<PAGE>
As mentioned, each fund had lower expenses than the average fund in its
peer group. As of February 28, 1999, the New York Tax-Free Bond Fund had an
expense ratio of 0.59% compared with an average of 1.12% for its Lipper
category, and the New York Tax-Free Money Fund had an expense ratio of 0.55%
compared with an average of 0.61% for its group.
================================================================================
NEW YORK TAX-FREE MONEY FUND
- --------------------------------------------------------------------------------
================================================================================
Performance Comparison
----------------------
Periods Ended 2/28/99 6 Months 12 Months
--------------------- -------- ---------
New York Tax-Free
Money Fund 1.30% 2.81%
Lipper New York Tax-Exempt
Money Market Funds Average 1.28 2.77
================================================================================
The fund's performance was modestly above the peer group average for both
the 6- and 12-month periods. The Fed's three consecutive rate cuts in the fall,
amounting to a total of 75 basis points, set the tone for the short-term
tax-exempt market. At the end of the fiscal year, the one-year yield was 60
basis points lower than it was 12 months earlier, with most of the move
occurring in the last six months.
<PAGE>
Money market funds benefited from the volatility in other markets.
Asinvestors shifted assets to safe havens, total money fund assets ballooned to
a record $1.4 trillion, an increase of 26% during the fiscal year. However,
tax-exempt money funds expanded at half the rate of the total industry and New
York-specific funds grew by 19% N not quite as robust because of their lower
yields versus comparable taxable yields. The improved financial condition of
many municipalities, along with low long-term rates, drastically reduced the
short-term borrowing needs of issuers. Annual municipal note issuance dipped to
its lowest level since 1989. Lower supply and steady demand kept rates low
versus taxable alternatives, which meant that the tax-exempt money market
appealed mostly to investors in high tax brackets.
During the past 12 months, we maintained a longer-than-average weighted
average maturity N 50 days at the end of February, 11 days longer than the peer
group average. We continue to believe that the imbalance between supply and
demand in our specific market, coupled with a stable monetary policy and
possible room for further Fed easing, supports our more aggressive stance.
================================================================================
<PAGE>
NEW YORK TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
================================================================================
Performance Comparison
----------------------
Periods Ended 2/28/99 6 Months 12 Months
--------------------- --------- ---------
New York Tax-Free
Bond Fund 2.35% 6.08%
Lipper New York Municipal
Debt Funds Average 1.91 5.22
================================================================================
Our aggressive duration posture early in the year positioned the fund well
for the drop in interest rates last summer, and we were able to capture much of
the increase in bond prices to post strong returns while outpacing our peer
group for both periods shown in the table. During the winter, we adopted a more
neutral stance but have recently begun extending duration again, since rates
have ticked higher. (Duration is a measure of a bond fund's sensitivity to
interest rates. For example, a fund with a duration of eight years would fall or
rise about 8% in price in response to a one-percentage-point rise or fall in
interest rates.) The combination of longer-term bonds and low expenses also kept
the fund's yield among the highest in its category. We always try to keep the
fund's dividend as high as possible, but when interest rates are falling it
becomes increasingly difficult.
<PAGE>
We also made some changes in the portfolio, reducing our holdings of New
York City securities while adding to education and lease revenue bonds. New York
City bonds had been our largest allocation, but we felt it was prudent to take
advantage of the price appreciation that followed the City's credit rating
upgrade. The education sector has benefited from the strong economy and stock
market, which has led to greater endowments and charitable contributions, and we
found several lease revenue bonds to be particularly attractive. We maintained
the fund's modest allocations in the hospital sector as competitive pressures
and overcapacity diminish its appeal. The fund remains well diversified among
sectors and individual issuers.
We continue to seek opportunities for new holdings that can add to the
fund's tax-free yield and may find them in select lower-quality securities. At
the end of February we held only a few lower-quality bonds, but their yields
currently look attractive compared with other fixed income securities. As
always, we will approach this segment of the market cautiously and choose bonds
only after rigorous analysis.
================================================================================
OUTLOOK
- --------------------------------------------------------------------------------
Despite the economy's strong momentum through the early part of the year,
we expect a decline in growth toward a more modest and sustainable pace later
this year. We also believe the forces supporting low inflation are still in
place. The Federal Reserve appears to have adopted a neutral monetary bias in
the belief that the economy contains an equal measure of upside and downside
risks.
<PAGE>
So far this year, a decreasing supply of municipal issues combined with
strong demand has helped move tax-exempt yields into more normal relationships
with taxable yields. While Treasury yields across maturities have moved 50 to 60
basis points higher since the beginning of 1999, municipal yields were mostly
unchanged. Overall, however, municipal securities are still appealing relative
to other fixed income securities, and we are optimistic about their outlook for
the rest of the year.
Respectfully submitted,
/s/
Patrice L. Berchtenbreiter
Chairman of the Investment Advisory Committee
New York Tax-Free Money Fund
/s/
William F. Snider
Chairman of the Investment Advisory Committee
New York Tax-Free Bond Fund
March 19, 1999
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- --------------------------------------------------------------------------------
Portfolio Highlights
Key statistics
8/31/98 2/28/99
New York Tax-Free Money Fund
Price Per Share $1.00 $1.00
Dividends Per Share
For 6 months 0.015 0.013
For 12 months 0.030 0.028
Dividend Yield (7-Day Compound) * 2.84% 2.37%
Weighted Average Maturity (days) 60 50
Weighted Average Quality ** First Tier First Tier
New York Tax-Free Bond Fund
Price Per Share $11.32 $11.23
Dividends Per Share
For 6 months 0.27 0.26
For 12 months 0.55 0.53
Dividend Yield *
For 6 months 4.90% 4.78%
For 12 months 5.09 4.88
30-Day Standardized Yield 4.40 4.15
Weighted Average Maturity (years) 19.8 19.9
Weighted Average Effective Duration (years) 7.7 8.0
Weighted Average Quality *** A+ A+
================================================================================
<PAGE>
* Dividends earned and reinvested for the periods indicated are annualized
and divided by the fund's net asset value at the end of the period.
** All securities purchased in the money fund are rated in the two highest
categories (tiers) as established by national rating agencies or, if
unrated, are deemed of comparable quality by T. Rowe Price.
*** Based on T. Rowe Price research.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- --------------------------------------------------------------------------------
Portfolio Highlights
Sector Diversification
Percent of Percent of
Net Assets Net Assets
8/31/98 2/28/99
---------- ----------
NEW YORK TAX-FREE MONEY FUND
- ----------------------------
Dedicated Tax Revenue 11% 15%
General Obligation - Local 17 14
Miscellaneous Revenue 14 12
Housing Finance Revenue 5 10
Educational Revenue 2 7
Prerefunded Bonds 9 7
Water and Sewer Revenue 10 6
Industrial and Pollution Control Revenue - 6
Escrowed to Maturity 2 6
Electric Revenue 3 5
Hospital Revenue 6 5
Air and Sea Transportation Revenue 5 5
Nuclear Revenue 5 5
General Obligation - State 2 2
All Other 11 -
Other Assets Less Liabilities -2 -5
Total 100% 100%
<PAGE>
NEW YORK TAX-FREE BOND FUND
- ---------------------------
General Obligation - Local 15% 12%
Lease Revenue 8 11
Dedicated Tax Revenue 9 11
Educational Revenue 6 8
Air and Sea Transportation Revenue 11 7
Water and Sewer Revenue 8 7
Ground Transportation Revenue 4 7
Hospital Revenue 8 6
Housing Finance Revenue 4 5
Prerefunded Bonds 4 5
Nuclear Revenue 5 5
Miscellaneous Revenue 5 4
General Obligation - State 4 4
Industrial and Pollution Control Revenue 1 3
Electric Revenue 4 3
All Other 2 2
Other Assets Less Liabilities 2 -
Total 100% 100%
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
These charts show the value of a hypothetical $10,000 investment in each
fund over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
[SEC Chart for New York Tax-Free Money Fund shown here]
[SEC Chart for New York Tax-Free Bond Fund shown here]
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- ------------------------------------
This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended 2/28/99 1 Year 3 Years 5 Years 10 Years
- --------------------- ------ ------- ------- --------
New York Tax-Free Money Fund 2.81% 2.94% 2.92% 3.22%
New York Tax-Free Bond Fund 6.08 6.93 6.35 7.89
Investment return represents past performance and will vary. Shares of the
bond fund may be worth more or less at redemption than at original purchase.
Investments in the Money Fund are not insured or guaranteed by the FDIC or any
other government agency. Although it seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
fund.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Money Fund
- --------------------------------------------------------------------------------
For a share outstanding throughout each period
Financial Highlights
Year
Ended
2/28/99 2/28/98 2/28/97 2/29/96 2/28/95
NET ASSET VALUE
Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment activities
Net investment income 0.028* 0.031* 0.029* 0.032* 0.025*
Distributions
Net investment income (0.028) (0.031) (0.029) (0.032) (0.025)
- --------------------------------------------------------------------------------
NET ASSET VALUE
================================================================================
End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Ratios/Supplemental=Data========================================================
Total return** 2.81%* 3.11%* 2.91%* 3.26%* 2.49%*
- --------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.55%* 0.55%* 0.55%* 0.55%* 0.55%*
- --------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 2.77%* 3.07%* 2.86%* 3.21%* 2.48%*
- --------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $106,119 $ 95,333 $ 82,729 $ 71,040 $ 66,154
- --------------------------------------------------------------------------------
** Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 0.55% voluntary expense limitation in
effect through 2/28/99.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Bond Fund
- --------------------------------------------------------------------------------
For a share outstanding throughout each period
Financial Highlights
Year
Ended
2/28/99 2/28/98 2/28/97 2/29/96 2/28/95
NET ASSET VALUE
Beginning of period $ 11.26 $ 10.80 $ 10.85 $ 10.37 $ 10.98
- --------------------------------------------------------------------------------
Investment activities
Net investment income 0.53 0.57 0.57* 0.58* 0.58*
Net realized and
unrealized gain (loss) 0.13 0.46 (0.05) 0.48 (0.53)
- --------------------------------------------------------------------------------
Total from
investment activities 0.66 1.03 0.52 1.06 0.05
- --------------------------------------------------------------------------------
Distributions
Net investment income (0.53) (0.57) (0.57) (0.58) (0.58)
Net realized gain (0.16) - - - (0.08)
- --------------------------------------------------------------------------------
Total distributions (0.69) (0.57) (0.57) (0.58) (0.66)
- --------------------------------------------------------------------------------
<PAGE>
NET ASSET VALUE
End of period $ 11.23 $ 11.26 $ 10.80 $ 10.85 $ 10.37
Ratios/Supplemental=Data========================================================
Total return** 6.08% 9.75% 5.02%* 10.44%* 0.74%*
- --------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.59% 0.61% 0.65%* 0.65%* 0.60%*
- --------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 4.77% 5.16% 5.35%* 5.42%* 5.71%*
- --------------------------------------------------------------------------------
Portfolio turnover rate 55.4% 55.0% 96.9% 116.0% 134.3%
- --------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $216,010 $177,393 $ 144,532 $ 134,933 $ 117,847
- --------------------------------------------------------------------------------
** Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 0.60% voluntary expense limitation in
effect through 2/28/95 and a 0.65% voluntary expense limitation in effect
3/1/95 through 2/28/97.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Money Fund
- --------------------------------------------------------------------------------
February 28, 1999
Statement of Net Assets
Par Value
In thousands
=NEW=YORK==103.7%==============================================================
Albany County, GO, 7.00%, 10/1/00 (Prerefunded 10/1/99+) $ 600 $ 631
- -------------------------------------------------------------------------------
Battery Park City Auth.
7.60%, 5/1/06 (Prerefunded 5/1/99+) 100 103
- -------------------------------------------------------------------------------
7.70%, 5/1/15 (Prerefunded 5/1/99+) 1,500 1,540
- -------------------------------------------------------------------------------
Brentwood Union Free School Dist., TAN, 3.75%, 6/30/99 2,000 2,001
- -------------------------------------------------------------------------------
Dormitory Auth. of the State of New York
City Univ. System
7.60%, 7/1/99 (Escrowed to Maturity) 100 101
- -------------------------------------------------------------------------------
Cornell Univ., VRDN (Currently 3.15%) 4,600 4,600
- -------------------------------------------------------------------------------
Memorial Sloan Kett Center, TECP
2.70%, 4/12/99 4,250 4,250
- -------------------------------------------------------------------------------
2.75%, 4/7/99 1,200 1,200
- -------------------------------------------------------------------------------
Oxford Univ. Press, VRDN (Currently 3.25%) 2,500 2,500
- -------------------------------------------------------------------------------
<PAGE>
Univ. Ed. Fac.
6.60%, 5/1/99 100 101
- -------------------------------------------------------------------------------
6.60%, 11/1/99 (Escrowed to Maturity) 300 307
- -------------------------------------------------------------------------------
State Univ.
7.125%, 5/15/17 (Prerefunded 5/15/99+) 1,925 1,979
- -------------------------------------------------------------------------------
Erie County Water Auth.
VRDN (Currently 2.65%) (AMBAC Insured) 3,750 3,750
- -------------------------------------------------------------------------------
Great Neck Water Auth.
VRDN (Currently 2.80%) (FGIC Insured) 375 375
- -------------------------------------------------------------------------------
Lawrence County IDA, ALCOA, VRDN (Currently 2.84%) * 3,300 3,300
- -------------------------------------------------------------------------------
Long Island Power Auth., Electric System
VRDN (Currently 3.02%) (MBIA Insured) 2,000 2,000
- -------------------------------------------------------------------------------
Massapequa Union Free School Dist., GO, TAN
4.00%, 6/30/99 1,000 1,001
- -------------------------------------------------------------------------------
Monroe County, GO
Public Improvement
4.20%, 6/1/99 (AMBAC Insured) 200 200
- -------------------------------------------------------------------------------
4.80%, 6/1/99 (AMBAC Insured) 20 20
- -------------------------------------------------------------------------------
4.80%, 6/1/99 (Escrowed to Maturity) 80 80
- -------------------------------------------------------------------------------
<PAGE>
Municipal Assistance Corp. of New York City
VRDN (Currently 2.65%) 1,000 1,000
- -------------------------------------------------------------------------------
4.30%, 7/1/99 1,200 1,203
- -------------------------------------------------------------------------------
5.00%, 7/1/99 500 502
- -------------------------------------------------------------------------------
Municipal Assistance Corp. of New York City
7.20%, 7/1/99 (Escrowed to Maturity) $ 1,765 $ 1,790
- -------------------------------------------------------------------------------
7.25%, 7/1/99 (Escrowed to Maturity) 250 253
- -------------------------------------------------------------------------------
Nassau County IDA, Cold Spring Harbor Laboratory
VRDN (Currently 3.15%) 4,800 4,800
- -------------------------------------------------------------------------------
New York City, GO
VRDN (Currently 3.30%) 100 100
- -------------------------------------------------------------------------------
VRDN (Currently 3.65%) 2,500 2,500
- -------------------------------------------------------------------------------
VRDN (Currently 3.65%) (FGIC Insured) 2,650 2,650
- -------------------------------------------------------------------------------
7.20%, 2/1/00 (Escrowed to Maturity) 30 31
- -------------------------------------------------------------------------------
7.25%, 8/15/16 (Prerefunded 8/15/99+) 400 413
- -------------------------------------------------------------------------------
7.40%, 10/1/99 (Escrowed to Maturity) 350 358
- -------------------------------------------------------------------------------
7.50%, 3/15/99 (Escrowed to Maturity) 235 235
- -------------------------------------------------------------------------------
7.50%, 8/15/08 (Prerefunded 8/15/99+) 385 398
- -------------------------------------------------------------------------------
7.50%, 10/1/13 (Prerefunded 10/1/99+) 290 302
- -------------------------------------------------------------------------------
7.75%, 8/15/18 (Prerefunded 8/15/99+) 250 259
- -------------------------------------------------------------------------------
8.00%, 6/1/99 (Escrowed to Maturity) 2,145 2,170
- -------------------------------------------------------------------------------
<PAGE>
New York City Housing Dev.
VRDN (Currently 2.70%) (FNMA Guaranteed) 3,000 3,000
- -------------------------------------------------------------------------------
Multifamily Rental Housing, Columbus Green
VRDN (Currently 2.70%) (FNMA Guaranteed) 800 800
- -------------------------------------------------------------------------------
Tribeca Tower, VRDN (Currently 2.75%) * 4,000 4,000
- -------------------------------------------------------------------------------
New York City IDA, American Civil Liberties Fac.
VRDN (Currently 2.75%) 967 967
- -------------------------------------------------------------------------------
New York City Municipal Water Fin. Auth.
6.00%, 6/15/19 (Prerefunded 6/15/99+) 405 408
- -------------------------------------------------------------------------------
Water and Sewer
VRDN (Currently 3.60%) (FGIC Insured) 1,700 1,700
- -------------------------------------------------------------------------------
New York City Transitional Fin. Auth.
VRDN (Currently 2.90%) 5,000 5,000
- -------------------------------------------------------------------------------
VRDN (Currently 3.15%) 200 200
- -------------------------------------------------------------------------------
New York City Trust for Cultural Resources
American Museum of National History
VRDN (Currently 2.65%) (MBIA Insured) 3,900 3,900
- -------------------------------------------------------------------------------
New York Environmental Fac., 4.00%, 6/15/99 500 501
- -------------------------------------------------------------------------------
New York Housing Fin. Agency, Mental Hygiene
7.50%, 5/1/99 (Escrowed to Maturity) 200 201
- -------------------------------------------------------------------------------
<PAGE>
New York Medical Care Fac., Security Hosp.
6.75%, 8/15/99 (Escrowed to Maturity) $ 15 $ 15
- -------------------------------------------------------------------------------
New York State, GO, VRDN (Currently 3.00%) 2,000 2,000
- -------------------------------------------------------------------------------
New York State Energy Research and Dev. Auth.
Orange and Rockland Utilities
VRDN (Currently 2.65%) (FGIC Insured) 3,600 3,600
- -------------------------------------------------------------------------------
New York State Environmental Fac.
4.25%, 5/15/99 150 150
- -------------------------------------------------------------------------------
5.70%, 9/15/99 200 203
- -------------------------------------------------------------------------------
New York State Environmental Fac., PCR
General Electric, TECP, 3.05%, 3/4/99 * 3,000 3,000
- -------------------------------------------------------------------------------
New York State Housing Fin. Agency, VRDN (Currently 2.75%) * 2,900 2,900
- -------------------------------------------------------------------------------
New York State Local Gov't. Assistance
VRDN (Currently 2.70%) 2,200 2,200
- -------------------------------------------------------------------------------
VRDN (Currently 2.80%) 5,000 5,000
- -------------------------------------------------------------------------------
New York State Medical Care Fac. Fin., Mental Health Services
7.75%, 8/15/10 (Prerefunded 2/15/00+)
(MBIA Insured) 1,000 1,064
- -------------------------------------------------------------------------------
New York State Power Auth.
2.90%, 9/1/99 3,000 3,000
- -------------------------------------------------------------------------------
3.45%, 3/1/99 1,885 1,885
- -------------------------------------------------------------------------------
<PAGE>
New York State Thruway Auth., Highway and Bridge Trust
5.00%, 4/1/99 (MBIA Insured) 565 566
- -------------------------------------------------------------------------------
Port Auth. of New York and New Jersey
VRDN (Currently 3.25%) * 5,000 5,000
- -------------------------------------------------------------------------------
4.20%, 7/1/99 145 146
- -------------------------------------------------------------------------------
Versatile Structures, VRDN (Currently 3.15%) 100 100
- -------------------------------------------------------------------------------
Smithtown Central School Dist., GO, TAN, 3.90%, 6/25/99 2,000 2,002
- -------------------------------------------------------------------------------
South Huntington Union Free School Dist., GO, TAN
3.90%, 6/30/99 2,000 2,002
- -------------------------------------------------------------------------------
Syracuse IDA, Syracuse Univ., VRDN (Currently 3.15%) 3,000 3,000
- -------------------------------------------------------------------------------
Westchester County, GO
7.00%, 12/1/99 500 515
- -------------------------------------------------------------------------------
TAN, 2.83%, 12/30/99 2,000 2,000
- -------------------------------------------------------------------------------
Total New York (Cost $110,028) 110,028
- -------------------------------------------------------------------------------
=PUERTO=RICO==0.9%=============================================================
Puerto Rico Aqueduct and Sewer Auth.
8.70%, 7/1/99 (FSA Insured)
(Escrowed to Maturity) $ 1,000 $ 1,017
- -------------------------------------------------------------------------------
<PAGE>
Total Puerto Rico (Cost $1,017) 1,017
=Total=Investments=in=Securities===============================================
104.6% of Net Assets (Cost $111,045) $ 111,045
Other Assets Less Liabilities (4,926)
NET ASSETS $ 106,119
Net Assets Consist of:
Accumulated net investment income - net of
distributions $ 3
Accumulated net realized gain/loss - net of
distributions (2)
Paid-in-capital applicable to 106,121,338
no par value shares of benefitial
interest outstanding; unlimited
number of shares authorized 106,118
NET ASSETS $ 106,119
NET ASSET VALUE PER SHARE $ 1.00
- --------------------------------------------------------------------------------
<PAGE>
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Corp.
GO General Obligation
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
TAN Tax Anticipation Note
TECP Tax-Exempt Commercial Paper
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price New York Tax-Free Bond Fund
- --------------------------------------------------------------------------------
February 28, 1999
Statement of Net Assets
Par Value
In thousands
NEW=YORK==92.0%==============================================================
Albany County Airport Auth.
5.50%, 12/15/19 (FSA Insured) * $ 2,000 $ 2,077
- -----------------------------------------------------------------------------
<PAGE>
Allegany County IDA
Hougton College Civic Fac.
5.00%, 1/15/10 495 499
- -----------------------------------------------------------------------------
5.00%, 1/15/11 520 520
- -----------------------------------------------------------------------------
5.25%, 1/15/18 400 398
- -----------------------------------------------------------------------------
Battery Park City Auth., 5.50%, 11/1/29 (AMBAC Insured) 3,150 3,309
- -----------------------------------------------------------------------------
Buffalo New York, General Improvement
5.125%, 2/1/14 1,500 1,555
- -----------------------------------------------------------------------------
Dormitory Auth. of the State of New York
City Univ., 5.75%, 7/1/11 (AMBAC Insured) 2,000 2,245
- -----------------------------------------------------------------------------
Columbia Univ., 5.00%, 7/1/18 1,000 1,000
- -----------------------------------------------------------------------------
Cornell Univ., 7.375%, 7/1/20 1,500 1,602
- -----------------------------------------------------------------------------
Maimonides Medical Center
5.75%, 8/1/35 (MBIA Insured) 1,500 1,581
- -----------------------------------------------------------------------------
Mental Health Services Fac., 5.75%, 8/15/22 2,500 2,664
- -----------------------------------------------------------------------------
New York and Presbyterian Hosp.
Zero Coupon, 8/15/36 (AMBAC Insured) 15,500 2,062
- -----------------------------------------------------------------------------
<PAGE>
New York Medical College
5.25%, 7/1/12 (MBIA Insured) 2,110 2,227
- -----------------------------------------------------------------------------
North General Hosp., 5.10%, 2/15/11 2,500 2,576
- -----------------------------------------------------------------------------
North Shore Health System
5.50%, 11/1/13 (MBIA Insured) 3,010 3,276
- -----------------------------------------------------------------------------
5.50%, 11/1/14 (MBIA Insured) 1,500 1,629
- -----------------------------------------------------------------------------
Nyack Hosp., 6.00%, 7/1/06 2,000 2,161
- -----------------------------------------------------------------------------
Rockefeller Univ.
4.75%, 7/1/37 2,000 1,883
- -----------------------------------------------------------------------------
6.75%, 7/1/11 1,365 1,492
- -----------------------------------------------------------------------------
Siena College, 5.75%, 7/1/26 (MBIA Insured) 2,000 2,159
- -----------------------------------------------------------------------------
State Univ. Ed. Fac.
5.00%, 5/15/17 2,100 2,085
- -----------------------------------------------------------------------------
7.50%, 5/15/11 2,300 2,824
- -----------------------------------------------------------------------------
Westchester County Court Fac.
5.25%, 8/1/14 2,500 2,627
- -----------------------------------------------------------------------------
5.25%, 8/1/16 4,250 4,411
- -----------------------------------------------------------------------------
<PAGE>
Erie County Water Auth.
VRDN (Currently 2.65%) (AMBAC Insured) $ 1,100 $ 1,100
- -----------------------------------------------------------------------------
Essex County IDA, PCR, 5.70%, 7/1/16 * 1,850 1,998
- -----------------------------------------------------------------------------
Long Island Power Auth., 5.25%, 12/1/26 5,000 5,025
- -----------------------------------------------------------------------------
Metropolitan Transportation Auth.
4.75%, 4/1/28 (FGIC Insured) 2,500 2,372
- -----------------------------------------------------------------------------
Commuter Fac.
5.00%, 7/1/11 (AMBAC Insured) 2,000 2,080
- -----------------------------------------------------------------------------
5.625%, 7/1/27 (MBIA Insured) 2,000 2,125
- -----------------------------------------------------------------------------
Service Contract, 5.50%, 7/1/13 1,510 1,598
- -----------------------------------------------------------------------------
Transportation Fac.
5.875%, 7/1/27 (MBIA Insured) 2,300 2,497
- -----------------------------------------------------------------------------
Mount Sinai Union Free School Dist., GO
6.20%, 2/15/17 (AMBAC Insured) 1,025 1,191
- -----------------------------------------------------------------------------
6.20%, 2/15/18 (AMBAC Insured) 515 599
- -----------------------------------------------------------------------------
Nassau County, GO
6.50%, 11/1/13 (FGIC Insured)
(Prerefunded 11/1/04+) 1,500 1,743
- -----------------------------------------------------------------------------
<PAGE>
Nassau County IDA
Hofstra Univ.
6.90%, 1/1/14 350 408
- -----------------------------------------------------------------------------
6.90%, 1/1/15 375 438
- -----------------------------------------------------------------------------
New Rochelle, GO
6.25%, 3/15/17 (MBIA Insured) 375 417
- -----------------------------------------------------------------------------
6.25%, 3/15/18 (MBIA Insured) 400 445
- -----------------------------------------------------------------------------
6.25%, 3/15/19 (MBIA Insured) 425 472
- -----------------------------------------------------------------------------
New York City, GO
VRDN (Currently 2.95%) 100 100
- -----------------------------------------------------------------------------
VRDN (Currently 3.30%) 800 800
- -----------------------------------------------------------------------------
VRDN (Currently 3.65%) 2,900 2,900
- -----------------------------------------------------------------------------
VRDN (Currently 3.65%) (FGIC Insured) 500 500
- -----------------------------------------------------------------------------
5.25%, 8/1/15 2,500 2,569
- -----------------------------------------------------------------------------
5.25%, 8/1/21 2,500 2,520
- -----------------------------------------------------------------------------
5.75%, 10/15/13 1,100 1,180
- -----------------------------------------------------------------------------
5.875%, 3/15/12 2,345 2,549
- -----------------------------------------------------------------------------
6.00%, 8/1/12 1,000 1,102
- -----------------------------------------------------------------------------
6.25%, 8/1/09 1,750 1,976
- -----------------------------------------------------------------------------
7.625%, 2/1/14 (Prerefunded 2/1/02+) 500 562
- -----------------------------------------------------------------------------
7.75%, 8/15/15 90 99
- -----------------------------------------------------------------------------
<PAGE>
New York City IDA
American Airlines, 5.40%, 7/1/20 * $ 1,500 $ 1,517
- -----------------------------------------------------------------------------
British Airways, 5.25%, 12/1/32 * 4,000 3,972
- -----------------------------------------------------------------------------
Brooklyn Navy Yard Cogeneration
5.65%, 10/1/28 * 2,500 2,553
- -----------------------------------------------------------------------------
Horace Mann School
4.90%, 7/1/13 (MBIA Insured) 1,320 1,330
- -----------------------------------------------------------------------------
5.00%, 7/1/23 (MBIA Insured) 2,500 2,472
- -----------------------------------------------------------------------------
Nightingale Bamford School, 5.85%, 1/15/20 1,410 1,491
- -----------------------------------------------------------------------------
Terminal One Group Assoc., 6.00%, 1/1/19 * 2,500 2,657
- -----------------------------------------------------------------------------
USTA National Tennis Center
6.375%, 11/15/14 (FSA Insured) 1,000 1,124
- -----------------------------------------------------------------------------
New York City Municipal Water Fin. Auth.
Water and Sewer
VRDN (Currently 3.60%) (FGIC Insured) 100 100
- -----------------------------------------------------------------------------
5.00%, 6/15/17 (FGIC Insured) 2,000 2,000
- -----------------------------------------------------------------------------
5.25%, 6/15/29 3,000 3,017
- -----------------------------------------------------------------------------
5.875%, 6/15/26 5,000 5,379
- -----------------------------------------------------------------------------
<PAGE>
New York City Transitional Fin. Auth.
4.75%, 11/15/23 5,000 4,762
- -----------------------------------------------------------------------------
5.25%, 11/15/13 3,000 3,164
- -----------------------------------------------------------------------------
Future Tax, 4.75%, 5/1/23 2,400 2,287
- -----------------------------------------------------------------------------
New York State, GO
7.125%, 11/15/16 (Prerefunded 11/15/00+) 500 542
- -----------------------------------------------------------------------------
New York State Energy Research and Dev. Auth., PCR
5.15%, 3/1/16 2,190 2,178
- -----------------------------------------------------------------------------
Consolidated Edison, 6.75%, 1/15/27 * 2,350 2,488
- -----------------------------------------------------------------------------
New York State Environmental Fac., PCR
New York City Municipal Water, 7.50%, 6/15/12 500 535
- -----------------------------------------------------------------------------
State Water Revolving Fund
5.75%, 6/15/12 1,000 1,120
- -----------------------------------------------------------------------------
6.90%, 5/15/15 505 585
- -----------------------------------------------------------------------------
6.90%, 11/15/15 750 868
- -----------------------------------------------------------------------------
New York State Housing Fin. Agency
Service Contract Obligations
7.375%, 9/15/21 (Prerefunded 3/15/02+) 150 169
- -----------------------------------------------------------------------------
State Univ. Construction
8.00%, 5/1/11 (Escrowed to Maturity) 1,000 1,306
- -----------------------------------------------------------------------------
<PAGE>
New York State Local Gov't. Assistance
5.00%, 4/1/21 $ 2,540 $ 2,530
- -----------------------------------------------------------------------------
5.00%, 4/1/23 3,000 2,934
- -----------------------------------------------------------------------------
6.00%, 4/1/14 2,000 2,281
- -----------------------------------------------------------------------------
New York State Medical Care Fac. Fin. Agency
6.125%, 2/15/14 (Prerefunded 2/15/04+) 150 168
- -----------------------------------------------------------------------------
Ellis Hosp., 8.00%, 2/15/08 (FHA Guaranteed) 40 41
- -----------------------------------------------------------------------------
Mental Health Services
6.375%, 8/15/10 (FGIC Insured)
(Prerefunded 2/15/02+) 450 492
- -----------------------------------------------------------------------------
New York Hosp., 6.50%, 8/15/29 (AMBAC Insured)
(Prerefunded 2/15/05+) 2,000 2,303
- -----------------------------------------------------------------------------
New York State Mortgage Agency
Homeowner Mortgage
5.40%, 4/1/29 * 1,500 1,514
- -----------------------------------------------------------------------------
6.40%, 4/1/27 * 990 1,078
- -----------------------------------------------------------------------------
7.50%, 4/1/26 * 3,245 3,534
- -----------------------------------------------------------------------------
7.75%, 4/1/16 500 522
- -----------------------------------------------------------------------------
<PAGE>
New York State Urban Dev.
Correctional Capital Fac.
5.00%, 1/1/13 2,500 2,523
- -----------------------------------------------------------------------------
7.00%, 1/1/21 (Prerefunded 1/1/02+) 500 555
- -----------------------------------------------------------------------------
Sr. Lien, 5.375%, 7/1/22 4,500 4,621
- -----------------------------------------------------------------------------
Niagara County, GO
Environmental Infrastructure
5.25%, 8/15/14 (MBIA Insured) 435 458
- -----------------------------------------------------------------------------
5.25%, 8/15/15 (MBIA Insured) 335 351
- -----------------------------------------------------------------------------
Niagara Frontier Transportation Airport Auth.
Greater Buffalo Int'l. Airport
6.125%, 4/1/14 (AMBAC Insured) * 1,385 1,492
- -----------------------------------------------------------------------------
North Hempstead, GO, 4.75%, 1/15/18 (FGIC Insured) 1,750 1,697
- -----------------------------------------------------------------------------
Nyack Union Free School Dist., GO
5.25%, 12/15/12 (FGIC Insured) 1,310 1,405
- -----------------------------------------------------------------------------
5.25%, 12/15/13 (FGIC Insured) 1,290 1,376
- -----------------------------------------------------------------------------
5.25%, 12/15/15 (FGIC Insured) 550 581
- -----------------------------------------------------------------------------
<PAGE>
Onondaga County IDA, Community General Hosp.
6.625%, 1/1/18 450 478
- -----------------------------------------------------------------------------
Port Auth. of New York and New Jersey
5.00%, 10/1/22 2,000 1,973
- -----------------------------------------------------------------------------
Port Auth. of New York and New Jersey
5.50%, 9/1/12 (MBIA Insured) * $ 900 $ 953
- -----------------------------------------------------------------------------
5.875%, 7/1/11 * 1,000 1,091
- -----------------------------------------------------------------------------
6.125%, 6/1/94 1,000 1,154
- -----------------------------------------------------------------------------
6.50%, 10/1/01 * 600 631
- -----------------------------------------------------------------------------
6.50%, 7/15/19 (FGIC Insured) * 2,000 2,232
- -----------------------------------------------------------------------------
6.50%, 11/1/26 * 1,500 1,594
- -----------------------------------------------------------------------------
6.75%, 4/15/26 (MBIA Insured) * 500 533
- -----------------------------------------------------------------------------
Special Project, 6.75%, 10/1/11 * 1,000 1,109
- -----------------------------------------------------------------------------
Versatile Structures, VRDN (Currently 3.15%) 400 400
- -----------------------------------------------------------------------------
Syracuse IDA, St. Joseph's Hosp. Health Center
7.50%, 6/1/18 (Prerefunded 6/1/01+) 1,000 1,104
- -----------------------------------------------------------------------------
<PAGE>
Triborough Bridge and Tunnel Auth.
4.75%, 1/1/24 (MBIA Insured) 3,000 2,865
- -----------------------------------------------------------------------------
5.125%, 1/1/15 (MBIA Insured) 4,000 4,131
- -----------------------------------------------------------------------------
5.50%, 1/1/17 1,275 1,375
- -----------------------------------------------------------------------------
United Nations Dev.
5.30%, 7/1/11 1,000 1,002
- -----------------------------------------------------------------------------
5.40%, 7/1/14 1,000 1,002
- -----------------------------------------------------------------------------
Utica Ind. Dev. Agency, Utica College, 5.75%, 8/1/28 500 509
- -----------------------------------------------------------------------------
Westchester County IDA, Wheelabrator
6.00%, 7/1/08 (AMBAC Insured) * 2,000 2,243
- -----------------------------------------------------------------------------
Western Nassau County Water Auth.
5.65%, 5/1/26 (AMBAC Insured) 1,000 1,060
- -----------------------------------------------------------------------------
Yonkers IDA, Civic Fac., St. Joseph Hosp.
6.20%, 3/1/20 1,000 999
- -----------------------------------------------------------------------------
Total New York (Cost $187,302) 198,737
<PAGE>
PUERTO=RICO==7.8%============================================================
Puerto Rico Commonwealth, GO, Public Improvement
4.50%, 7/1/23 1,250 1,147
- -----------------------------------------------------------------------------
Puerto Rico Commonwealth
Highway and Transportation Auth.
5.00%, 7/1/36 1,000 988
- -----------------------------------------------------------------------------
5.40%, 7/1/25 2,000 2,047
- -----------------------------------------------------------------------------
6.375%, 7/1/08 (FSA Insured) 1,000 1,095
- -----------------------------------------------------------------------------
Puerto Rico Commonwealth Infrastructure Fin. Auth.
Special Tax, 7.75%, 7/1/08 340 348
- -----------------------------------------------------------------------------
Puerto Rico Electric Power Auth.
4.75%, 7/1/24 $ 2,750 $ 2,606
- -----------------------------------------------------------------------------
5.25%, 7/1/21 3,000 3,014
- -----------------------------------------------------------------------------
7.125%, 7/1/14 1,000 1,029
- -----------------------------------------------------------------------------
Puerto Rico Public Building Auth., GO, Gov't. Fac.
5.00%, 7/1/27 (AMBAC Insured) 3,000 2,991
- -----------------------------------------------------------------------------
5.25%, 7/1/21 1,500 1,506
- -----------------------------------------------------------------------------
Total Puerto Rico (Cost $15,795) 16,771
<PAGE>
=Total=Investments=in=Securities==============================================
99.8% of Net Assets (Cost $203,097) $ 215,508
Other Assets Less Liabilities 502
NET ASSETS $ 216,010
Net Assets Consist of:
Accumulated net investment income - net
of distributions $ 9
Accumulated net realized gain/loss - net of
distributions 9
Net unrealized gain (loss) 12,411
Paid-in-capital applicable to 19,243,379
no par shares of beneficial interest
outstanding; unlimited number of shares authorized 203,581
NET ASSETS $ 216,010
NET ASSET VALUE PER SHARE $ 11.23
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FSA Financial Security Assurance Corp.
GO General Obligation
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- --------------------------------------------------------------------------------
Statement of Operations
Money Fund Bond Fund
In thousands
Year Year
Ended Ended
2/28/99 2/28/99
==Investment=Income==========================================================
Interest income $ 3,392 $ 10,409
- -----------------------------------------------------------------------------
Expenses
Investment management 348 818
Custody and accounting 91 118
Shareholder servicing 80 150
Prospectus and shareholder reports 12 23
Legal and audit 11 12
Registration 10 21
Trustees 6 6
Miscellaneous 3 4
- -----------------------------------------------------------------------------
Total expenses 561 1,152
Expenses paid indirectly - (1)
- -----------------------------------------------------------------------------
Net expenses 561 1,151
- -----------------------------------------------------------------------------
Net investment income 2,831 9,258
- -----------------------------------------------------------------------------
<PAGE>
==Realized=and=Unrealized=Gain=(Loss)========================================
Net realized gain (loss)
Securities - 1,848
Futures - 35
- -----------------------------------------------------------------------------
Net realized gain (loss) - 1,883
Change in net unrealized gain or loss
on securities - 245
- ------------------------------------------------------------------------------
Net realized and unrealized gain (loss) - 2,128
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,831 $ 11,386
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
Money Fund Bond Fund
In thousands
Year Year
Ended Ended
2/28/99 2/28/98 2/28/99 2/28/98
Increase=(Decrease)=in=Net=Assets===============================================
Operations
Net investment income $ 2,831 $ 2,708 $ 9,258 $ 8,048
Net realized gain (loss) - 1 1,883 1,465
Change in net unrealized
gain or loss - - 245 5,151
- -----------------------------------------------------------------------------
Increase (decrease) in
net assets from operations 2,831 2,709 11,386 14,664
- -----------------------------------------------------------------------------
Distributions to shareholders
Net investment income (2,831 (2,708) (9,258) (8,048)
Net realized gain - - (2,765) -
- -----------------------------------------------------------------------------
Decrease in net assets
from distributions (2,831) (2,708) (12,023) (8,048)
- -----------------------------------------------------------------------------
Capital share transactions *
Shares sold 87,072 90,280 69,913 48,316
Distributions reinvested 2,735 2,609 9,548 6,138
Shares redeemed (79,021) (80,286) (40,207) (28,209)
- -----------------------------------------------------------------------------
Increase (decrease) in
net assets from capital
share transactions 10,786 12,603 39,254 26,245
<PAGE>
Net=Assets===================================================================
Increase (decrease)
during period 10,786 12,604 38,617 32,861
Beginning of period 95,333 82,729 177,393 144,532
End of period $106,119 $ 95,333 $ 216,010 $177,393
*Share information
Shares sold 87,072 90,280 6,222 4,379
Distributions reinvested 2,735 2,609 850 558
Shares redeemed (79,021) (80,286) (3,582) (2,566)
- -----------------------------------------------------------------------------
Increase (decrease)
in shares outstanding 10,786 12,603 3,490 2,371
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- --------------------------------------------------------------------------------
February 28, 1999
Notes to Financial Statements
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
T. Rowe Price State Tax-Free Income Trust (the trust) is registered under
the Investment Company Act of 1940. The New York Tax-Free Money Fund (the Money
Fund) and the New York Tax-Free Bond Fund (the Bond Fund), nondiversified,
open-end management investment companies, are two of the portfolios established
by the trust and commenced operations on August 28, 1986.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company industry;
these principles may require the use of estimates by fund management.
Valuation Debt securities are generally traded in the over-the-counter
market. Except for securities held by the Money Fund, investments in securities
are stated at fair value as furnished by dealers who make markets in such
securities or by an independent pricing service, which considers yield or price
of bonds of comparable quality, coupon, maturity, and type, as well as prices
quoted by dealers who make markets in such securities. Securities held by the
Money Fund are valued at amortized cost.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of that
fund, as authorized by the Board of Trustees.
<PAGE>
Premiums and Discounts Premiums and original issue discounts on municipal
securities are amortized for both financial reporting and tax purposes. Market
discounts are recognized upon disposition of the security as gain or loss for
financial reporting purposes and as ordinary income for tax purposes.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Distributions to shareholders are
recorded by each fund on the ex-dividend date. Income and capital gain
distributions are determined in accordance with federal income tax regulations
and may differ from those determined in accordance with generally accepted
accounting principles. Expenses paid indirectly reflect credits earned on daily,
uninvested cash balances at the custodian, used to reduce the fund's custody
charges.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities for the Bond Fund, other than
short-term securities, aggregated $134,000,000 and $105,690,000, respectively,
for the year ended February 28, 1999.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since each fund intends
to continue to qualify as a regulated investment company and distribute all of
its income. As of February 28, 1999, the Money Fund had capital loss
carryforwards for federal income tax purposes of $2,000, all of which expires in
2005. The Money Fund intends to retain gains realized in future periods that may
be offset by available capital loss carryforwards.
<PAGE>
At February 28, 1999, the cost of investments for the Money and Bond Funds
for federal income tax purposes was substantially the same as for financial
reporting and totaled $111,045,000 and $203,097,000, respectively. For the Money
Fund, amortized cost is equivalent to value; and for the Bond Fund, net
unrealized gain aggregated $12,411,000 at period-end, of which $12,508,000
related to appreciated investments and $97,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between each fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee,
of which $24,000 and $69,000 were payable at February 28, 1999 by the Money and
Bond Funds, respectively. The fee is computed daily and paid monthly, and
consists of an individual fund fee equal to 0.10% of average daily net assets
and a group fee. The group fee is based on the combined assets of certain mutual
funds sponsored by the manager or Rowe Price-Fleming International, Inc. (the
group). The group fee rate ranges from 0.48% for the first $1 billion of assets
to 0.30% for assets in excess of $80 billion. At February 28, 1999, and for the
year then ended, the effective annual group fee rate was 0.32%. Each fund pays a
pro-rata share of the group fee based on the ratio of its net assets to those of
the group.
Under the terms of the investment management agreement, the manager is
required to bear any expenses through February 28, 1999, which would cause the
Money Fund's ratio of expenses to average net assets to exceed 0.55%. Pursuant
to this agreement, $83,000 of management fees were not accrued by the Money Fund
for the year ended February 28, 1999. In total, $177,000 remains subject to
reimbursement through February 28, 2001. Subject to shareholder approval, the
Money Fund may reimburse the manager for these expenses, provided that average
net assets have grown or expenses have declined sufficiently to allow
reimbursement without causing the Money Fund's ratio of expenses to average net
assets to exceed 0.55%.
<PAGE>
In addition, each fund has entered into agreements with the manager and a
wholly owned subsidiary of the manager, pursuant to which each fund receives
certain other services. The manager computes the daily share price and maintains
the financial records of each fund. T. Rowe Price Services, Inc. is each fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the funds. The Money and Bond Funds incurred expenses
pursuant to these related party agreements totaling approximately $133,000 and
$195,000, respectively, for the year ended February 28, 1999, of which $12,000
and $17,000, respectively, were payable at period-end.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- --------------------------------------------------------------------------------
Report of Independent Accountants
To the Board of Trustees of T. Rowe Price State Tax-Free Income Trust
and Shareholders of New York Tax-Free Money Fund and New York
Tax-Free Bond Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
New York Tax-Free Money Fund and New York Tax-Free Bond Fund (two of the
portfolios comprising T. Rowe Price State Tax-Free Income Trust, hereafter
referred to as "the Funds") at February 28, 1999, and the results of each of
their operations, the changes in each of their net assets and the financial
highlights for each of the fiscal periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at February 28, 1999 by
correspondence with custodians, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
March 17, 1999
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- --------------------------------------------------------------------------------
Tax Information (Unaudited) for the Tax Year Ended 2/28/99
- ----------------------------------------------------------
We are providing this information as required by the Internal Revenue Code.
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The Bond Fund's distributions to shareholders included: * $551,000 from
short-term capital gains, * $2,214,000 from long-term capital gains, subject to
the 20% rate gains category,
* $9,122,000 which qualified as exempt-interest dividends.
The Money Fund's dividend income included $2,847,000 which qualified
as exempt-interest dividends.
===============================================================================
<PAGE>
T. Rowe Price Shareholder Services
- --------------------------------------------------------------------------------
Investment Services And Information
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access[registration mark]
and the T. Rowe
Price Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals,
and other securities at a savings over full-service commission rates.
<PAGE>
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and
results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund
results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning
Kit.
================================================================================
<PAGE>
T. Rowe Price Mutual Funds
- --------------------------------------------------------------------------------
STOCK FUNDS
- ---------------------------------------------------------------------------
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Total Equity Market Index
Value
<PAGE>
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
- ---------------------------------------------------------------------------
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
<PAGE>
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free**
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond***
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
- ---------------------------------------------------------------------------
International/Global
Emerging Markets Bond
Global Bond+
International Bond
MONEY MARKET FUNDS++
- ---------------------------------------------------------------------------
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
<PAGE>
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
- ---------------------------------------------------------------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
- ---------------------------------------------------------------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
<PAGE>
* Closed to new investors.
** Formerly named Florida Insured Intermediate Tax-Free.
*** Formerly named Tax-Free Insured Intermediate Bond.
+ Formerly named Global Government Bond.
++ Investments in the funds are not insured or guaranteed by the FDIC or
any other government agency. Although the funds seek to preserve the value of
your investment at $1.00 per share, it is possible to lose money by investing in
the funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
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FOR YIELD, PRICE, LAST TRANSACTION,
CURRENT BALANCE, OR TO CONDUCT
TRANSACTIONS, 24 HOURS, 7 DAYS
A WEEK, CALL TELE*ACCESS [REGISTRATION MARK]:
1-800-638-2587 toll free
<PAGE>
FOR ASSISTANCE
WITH YOUR EXISTING
FUND ACCOUNT, CALL:
shareholder service center
1-800-225-5132 toll free
410-625-6500 Baltimore area
TO OPEN A BROKERAGE ACCOUNT
OR OBTAIN INFORMATION, CALL:
1-800-638-5660 toll free
INTERNET ADDRESS:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus of the
T. Rowe Price Small-Cap Value Fund.
INVESTOR CENTERS:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
4200 West Cypress St.
10th Floor
Tampa, FL 33607
T. Rowe Price Investment Services, Inc., Distributor. C04-050 2/28/99
