<PAGE>
To the Shareholders
Seligman New Jersey Municipal Fund posted strong results for its fiscal year
ended September 30, 1998. Although the growth of the US economy slowed from its
record pace, the expansion continued. Inflation and interest rates reached their
lowest levels in a quarter century, and unemployment was at its lowest level
since 1970.
Despite ongoing strength in the US, economic turmoil spread throughout the rest
of the world. The Asian financial crisis worsened, Japan failed to resolve its
banking problems, Russia's economy became chaotic, and economic crises loomed
throughout much of Latin America, particularly in Brazil. Fears of risk in
nearly all types of financial assets drove investors out of the equity markets
and into the relative safety and quality of investments such as US Treasury
bonds, often a haven from a turbulent stock market. This "flight to quality"
helped create an attractive environment for municipal bonds.
Major factors influencing the market for municipal bonds over the year were the
prolonged Treasury bond rally and heavy issuance of municipal securities.
Municipal bond holders fared well as interest rates generally declined over this
time period. Nonetheless, the performance of the municipal market lagged that of
the Treasury bond market, as investors focused on quality because of concerns
about financial instability. Treasury bond prices rose sharply over the 12-month
period, sending yields significantly lower. At one point in the period, selected
municipal obligations traded at the same yield as Treasuries, even though
municipals offered more favorable tax treatment.
Looking ahead, we see the favorable climate for municipal bonds continuing. Low
inflation and a growing economy should serve to protect the value of municipal
investments. Fewer new issues may be entering the market, which could tighten
the supply/demand balance. This could improve overall total rate-of-return
prospects. Also, although the US economy continues to grow, this growth is
slowing, and the global situation is forcing the Federal Reserve into a more
benign strategy on interest rates. The Fed has already cut short-term rates
twice, and we expect more cuts until a semblance of international stability
emerges. Finally, the municipal market's record of safety and stability offers
further appeal to investors in these more troubled times, especially as equity
market volatility continues.
All in all, we feel the investment attractiveness of municipals remains
compelling. In this period of global economic uncertainty and low interest
rates, municipals are an appropriate alternative for those investors with
suitable investment requirements.
As you may know, companies are modifying their computer systems to recognize
dates of January 1, 2000, and beyond. This is often referred to as the "Y2K"
problem. Unless systems are updated, many applications may interpret the last
two digits of the year to mean 1900 instead of 2000. J. & W. Seligman & Co.
Incorporated, the Seligman Investment Companies, and Seligman Data Corp., your
shareholder service agent, have jointly established a team to ensure that your
investment and shareholder services are not disrupted. This team is supported by
consulting firms specializing in Y2K solutions. Substantial work has been
performed to date, and we are confident that when our plans are finalized and
all systems are tested, there will be no disruption in the services provided by
your Fund.
Thank you for your continued support of Seligman New Jersey Municipal Fund. We
look forward to serving your investment needs in the many years to come. A
discussion with your Portfolio Manager, performance overview, portfolio
holdings, and financial statements follow this letter.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-----------------
Brian T. Zino
President
October 30, 1998
1
<PAGE>
Interview With Your Portfolio Manager,
Thomas G. Moles
Q. What economic factors influenced Seligman New Jersey Municipal Fund in the
last 12 months?
A. The continuing combination of low inflation, low unemployment, and steady
economic growth throughout the past 12 months sustained what became one of
the nation's longest peacetime economic expansions. This contributed to the
overall improvement of the financial condition of America's states, cities,
and municipalities. Over the past year, credit rating upgrades significantly
outnumbered rating downgrades. These upgrades enhanced the overall
creditworthiness of the municipal marketplace.
But, by the end of your Fund's fiscal year, there was widespread expectation
that the US may be unable to avoid the economic slowdown that has already
gripped much of the world. While many economists were calling a recession
unlikely, the fact that they were including its potential in their forecasts
implied that the ongoing domestic economic expansion would not continue. In
the final months of the fiscal year, turmoil in world markets began to
contribute to a modest slowdown in the pace of US economic growth, and
prevented an acceleration in the rate of inflation. In September, the
Federal Reserve Board lowered the federal funds rate by one-quarter of one
percent. With a warning that growing fear among investors and lenders was
threatening the nation's economic expansion, the Fed unexpectedly cut
interest rates again in October, the first time in four and a half years
that the central bank had changed interest-rate policy outside one of its
normally scheduled meetings. This unusual timing suggested that the Fed
believed that the domestic economy is beginning to deteriorate as the
worldwide financial crisis gains momentum, and that a credit shortage may be
developing that could further curb growth. Fed officials have hinted that
more interest-rate reductions will ensue if the global financial turmoil
escalates. Declining US equity markets reflected these fears, as investors
sold stocks in favor of the relative safety and quality of US Treasury
bonds, which are often considered a haven from a volatile stock market.
A TEAM APPROACH
Seligman New Jersey Municipal Fund is managed by the Seligman Municipals Team,
headed by Thomas G. Moles. Mr. Moles is assisted in the management of the Fund
by a group of seasoned professionals who are responsible for research and
trading consistent with the Fund's investment objective.
[PHOTO]
Seligman Municipals Team: (from left) Audrey Kuchtyak, Theresa Barion, Debra
McGuinness, (seated) Eileen Comerford, Thomas G. Moles (Portfolio Manager)
2
<PAGE>
Interview With Your Portfolio Manager,
Thomas G. Moles
Q. What market factors influenced Seligman New Jersey Municipal Fund in the
last 12 months?
A. Overall, Seligman New Jersey Municipal Fund ended its fiscal year on a
positive note. During the period, long-term municipal yields fluctuated
within a narrow range, decreasing by almost one-half of a point. The
declining interest-rate environment led to rising prices for the majority of
holdings and competitive performance results for the Fund's net asset value.
However, the municipal market underperformed the US Treasury market during
the 12-month period. The ongoing strength in the economy over the year
caused the supply of Treasury bonds to shrink, as the federal government
needed to borrow less after running its first budget surplus in 29 years.
But, the solid economy and low interest rates caused the supply of municipal
bonds to grow. The net reduction in Treasury financing and the increasing
municipal bond issuance was compounded by the increased investor demand for
Treasuries. These factors caused the decline in Treasury yields to
significantly outpace the drop in municipal yields. Because of these
factors, long-term municipal bonds have not been as attractive, relative to
long-term Treasuries, since 1986, when proposed tax legislation threatened
the tax-exempt status of municipal securities.
Q. What was your investment strategy?
A. Throughout the 12-month period, the long-term interest-rate outlook was
positive, and Seligman New Jersey Municipal Fund was positioned to benefit
from the declining interest-rate environment. The Seligman Municipals Team
engaged in duration-extension trades, selling shorter-term holdings and
replacing them with long-term, current-coupon bonds. Current-coupon bonds
have coupon rates that are at or near current market rates. Generally, when
long-term bond yields decline, the prices appreciate more than those of
shorter-term bonds.
During the past 12 months, we also improved the call protection of the
portfolios. As the bonds within the portfolio mature, older holdings
approach their optional call dates (a callable bond can be redeemed by the
issuer, prior to maturity, on specified dates and at predetermined prices).
Declining interest rates increase the risk that these bonds will be called
by the issuer. The lower interest-rate environment over the 12-month period
prompted many municipal issuers to retire outstanding, higher-coupon debt.
Additionally, as a direct result of the significant increase in refunding
volume, many of the portfolio's holdings were advance-refunded, which had a
positive impact on performance. In general, when a municipal bond is
refunded, total return performance is improved, and the bond's rating is
often upgraded.
Q. What is your outlook?
A. Long-term municipal yields have fallen to levels not seen in many years.
Municipal securities continue to offer a significant yield advantage
compared to the after-tax returns of other fixed-income investments.
Further, as the yield spread between municipal and Treasury bonds
normalizes, municipal market performance should improve, relative to the
Treasury market. Finally, the municipal market's record of safety and
stability may become more appealing as volatility persists in the US equity
markets. Consequently, we remain optimistic about the long-term prospects
for the municipal bond market, and for Seligman New Jersey Municipal Fund.
3
<PAGE>
Performance Overview and Portfolio Summary
This chart compares a $10,000 hypothetical investment made in Seligman New
Jersey Municipal Fund Class A shares with and without the initial 4.75% maximum
sales charge, for the 10-year period ended September 30, 1998, to a $10,000
hypothetical investment made in the Lehman Brothers Municipal Bond Index (Lehman
Index) for the same period. The performance of Seligman New Jersey Municipal
Fund Class D shares is not shown in this chart but is included in the table on
page 5. It is important to keep in mind that the Lehman Index does not include
any fees or sales charges and does not reflect state-specific bond market
performance. The table on page 5 also includes relevant portfolio
characteristics.
With Sales Charge Without Sales Charge Lehman Index
9/30/88 9,523 10,000 10,000
12/31/88 9,822 10,315 10,185
3/31/89 9,918 10,415 10,252
6/30/89 10,543 11,071 10,859
9/30/89 10,466 10,990 10,867
12/31/89 10,860 11,405 11,284
3/31/90 10,836 11,379 11,335
6/30/90 11,100 11,657 11,600
9/30/90 10,994 11,545 11,607
12/31/90 11,596 12,177 12,107
3/31/91 11836 12,429 12,381
6/30/91 12,082 12,688 12,645
9/30/91 12,530 13,158 13,136
12/31/91 12,876 13,521 13,578
3/31/92 12,858 13,502 13,619
6/30/92 13,431 14,104 14,136
9/30/92 13,745 14,434 14,511
12/31/92 14,033 14,736 14,775
3/31/93 14,574 15,305 15,323
6/30/93 15,145 15,904 15,824
9/30/93 15,672 16,457 16,359
12/31/93 15,769 16,560 16,588
3/31/94 14,881 15,627 15,677
6/30/94 14,968 15,718 15,851
9/30/94 15,006 15,758 15,959
12/31/94 14,799 15,541 15,729
3/31/95 15,802 16,594 16,841
6/30/95 16,114 16,922 17,247
9/30/95 16,472 17,298 17,744
12/31/95 17,102 17,960 18,475
3/31/96 16,806 17,649 18,251
6/30/96 16,979 17,830 18,392
9/30/96 17,356 18,226 18,815
12/31/96 17,684 18,570 19,295
3/31/97 17,588 18,470 19,250
6/30/97 18,149 19,059 19,914
9/30/97 18,737 19,676 20,516
12/31/97 19,263 20,229 21,072
3/31/98 19,457 20,432 21,314
6/30/98 19,785 20,777 21,638
9/30/98 20,398 21,421 22,302
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
Performance data quoted represent changes in prices and assume that all
distributions within the period are invested in additional shares. The rates of
return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
4
<PAGE>
Performance Overview and Portfolio Summary
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended September 30, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
------------------------------------------------
CLASS D
SINCE
SIX ONE FIVE 10 INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
--------- ------ ------- ------- ------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (0.16)% 3.66% 4.39% 7.39% n/a
Without Sales Charge 4.84 8.87 5.41 7.92 n/a
CLASS D**
With 1% CDSC 3.27 6.97 n/a n/a n/a
Without CDSC 4.27 7.97 n/a n/a 4.78%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29+
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended September 30, 1998
9/30/98 3/31/98 9/30/97 DIVIDENDS0 CAPITAL GAIN0 SEC YIELD00
-------- -------- -------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.78 $7.59 $7.56 CLASS A $0.346 $0.081 3.73%
CLASS D 7.86 7.68 7.64 CLASS D 0.289 0.081 3.17
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR++ MOODY'S/S&P RATINGS++
<S> <C> <C> <C>
Revenue Bonds 81% Aaa/AAA 53%
General Obligation Bonds 19 Aa/AA 18
A/A 20
Baa/BBB 9
</TABLE>
WEIGHTED AVERAGE MATURITY 24.2 years
- ------------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price and assume all distributions
within the period are invested in additional shares. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class D shares are calculated with and
without the effect of the 1% contingent deferred sales charge ("CDSC"),
charged on redemptions made within one year of the date of purchase. A
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.
*** The Lehman Index is an unmanaged index that does not include any fees or
sales charges and does not reflect state-specific bond market performance.
Investors cannot invest directly in an index.
+ From 1/31/94.
0 Represents per share amount paid or declared for the year ended September
30, 1998.
00 Current yield, representing the annualized yield for the 30-day period ended
September 30, 1998, has been computed in accordance with SEC regulations and
will vary.
++ Percentages based on market values of long-term holdings at September 30,
1998.
5
<PAGE>
Portfolio of Investments
September 30, 1998
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ---------- ------------------- ------------ -----------
<S> <C> <C> <C>
$2,500,000 Brick Township Municipal Utilities Authority, NJ Rev., 6 1/2% due 12/1/2012 Aaa/AAA $ 2,782,100
1,000,000 Camden County, NJ Health Systems Improvement Authority Rev. (Catholic
Health East), 5% due 11/15/2028 ...................................... Aaa/AAA 1,006,960
3,000,000 Howell Township, NJ GOs, 6.80% due 1/1/2014 ............................. Aaa/AAA 3,305,370
3,000,000 Middletown, NJ Board of Education School GOs, 5.80% due 8/1/2019 ........ Aaa/AAA 3,286,590
2,000,000 New Jersey Economic Development Authority Rev. (The Trustees
of the Lawrenceville School Project), 5 3/4% due 7/1/2016 ........... Aa2/NR 2,191,100
3,000,000 New Jersey Economic Development Authority Gas Facilities Rev.
(NUI Corporation Project), 5.70% due 6/1/2032* ....................... Aaa/AAA 3,223,170
2,900,000 New Jersey Economic Development Authority Sewage Facilities Rev.
(Anheuser-Busch Project), 5.85% due 12/1/2030* ....................... A1/A+ 3,173,963
1,000,000 New Jersey Economic Development Authority Water Facilities Rev.
(Middlesex Water Co. Project), 5.20% due 10/1/2022.................... Aaa/AAA 1,017,010
3,000,000 New Jersey Economic Development Authority Water Facilities Rev.
(New Jersey American Water Co., Inc.), 5 3/8% due 5/1/2032* .......... Aaa/AAA 3,112,350
3,000,000 New Jersey Educational Facilities Financing Authority Rev.
(Institute for Advanced Study), 5% due 7/1/2021....................... Aaa/AA+ 3,032,100
2,000,000 New Jersey Educational Facilities Financing Authority Rev.
(Princeton University), 6% due 7/1/2024 .............................. Aaa/AAA 2,218,780
1,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(St. Clare's Riverside Medical Center), 5 3/4% due 7/1/2014 .......... Aaa/AAA 1,082,920
1,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(The Medical Center at Princeton), 5% due 7/1/2028 ................... Aaa/AAA 1,007,000
3,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Hackensack University Medical Center), 5.20% due 1/1/2028 ........... Aaa/AAA 3,064,350
3,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Holy Name Hospital), 6% due 7/1/2025 ................................ NR/BBB+ 3,187,860
2,250,000 New Jersey Health Care Facilities Financing Authority Rev. (AHS
Hospital Corporation), 5% due 7/1/2027 ............................... Aaa/AAA 2,264,715
690,000 New Jersey Housing & Mortgage Finance Agency (Home Mortgage
Purchase Rev.), 7 7/8% due 10/1/2016 ................................ Aaa/AAA 696,983
220,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
7.65% due 10/1/2016 .................................................. Aaa/AAA 229,772
<FN>
- ------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
</FN>
See Notes to Financial Statements.
</TABLE>
6
<PAGE>
Portfolio of Investments
September 30, 1998
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ---------- ------------------- ------------ -----------
<S> <C> <C> <C>
$1,500,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
6% due 10/1/2021* .................................................... Aaa/AAA $ 1,601,505
250,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
7.70% due 10/1/2029* ................................................. Aaa/AAA 259,930
3,000,000 New Jersey State GOs, 5 5/8% due 7/15/2015 .............................. Aa1/AA+ 3,259,620
3,000,000 Port Authority of New York & New Jersey Consolidated Rev.,
5 3/4% due 6/15/2030 ................................................. A1/AA- 3,224,460
2,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2036 Baa1/A 2,180,920
3,200,000 Rutgers State University, NJ, 5.20% due 5/1/2027......................... A1/AA 3,289,056
2,500,000 Salem County, NJ Improvement Authority Rev. (Correctional Facility
& Courthouse Annex), 5.70% due 5/1/2017 .............................. Aaa/AAA 2,660,950
2,500,000 Salem County, NJ Pollution Control Financing Authority Waste Disposal Rev.
(E. I. duPont de Nemours & Co.), 6 1/8% due 7/15/2022* ............... Aa3/AA- 2,707,750
1,750,000 South Jersey Port Corporation, NJ Marine Terminal Rev., 6 7/8% due 1/1/2020 NR/A+ 1,780,503
1,250,000 South Jersey Port Corporation, NJ Marine Terminal Rev., 5.60% due 1/1/2023 NR/A+ 1,297,012
-----------
TOTAL MUNICIPAL BONDS (Cost $57,442,953)-- 98.1% ...................................................... 62,144,799
VARIABLE RATE DEMAND NOTES (Cost $200,000)-- 0.3% ..................................................... 200,000
OTHER ASSETS LESS LIABILITIES-- 1.6% .................................................................. 976,091
-----------
NET ASSETS-- 100.0% ................................................................................... $63,320,890
===========
<FN>
- ------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal alternative minimum tax.
</FN>
See Notes to Financial Statements.
</TABLE>
7
<PAGE>
Statement of Assets and Liabilities
September 30, 1998
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value:
Long-term holdings (Cost $57,442,953).......................... $62,144,799
Short-term holdings (Cost $200,000)............................ 200,000 $62,344,799
----------
Cash................................................................................. 103,397
Interest receivable.................................................................. 1,021,226
Receivable for securities sold....................................................... 88,255
Receivable for Capital Stock sold.................................................... 10,712
Expenses prepaid to shareholder service agent........................................ 9,038
Other................................................................................ 853
-----------
TOTAL ASSETS......................................................................... 63,578,280
-----------
LIABILITIES:
Dividends payable.................................................................... 98,042
Payable for Capital Stock repurchased................................................ 31,350
Accrued expenses, taxes, and other................................................... 127,998
-----------
TOTAL LIABILITIES.................................................................... 257,390
-----------
NET ASSETS........................................................................... $63,320,890
===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($.001 par value; 100,000,000 shares authorized; 8,141,043
shares outstanding):
Class A........................................................................... $ 7,940
Class D........................................................................... 201
Additional paid-in capital........................................................... 57,863,025
Undistributed net realized gain...................................................... 747,878
Net unrealized appreciation of investments........................................... 4,701,846
-----------
NET ASSETS........................................................................... $63,320,890
===========
NET ASSET VALUE PER SHARE:
CLASS A ($61,738,501 / 7,939,842 shares)............................................. $7.78
=====
CLASS D ($1,582,389 / 201,201 shares)................................................ $7.86
=====
</TABLE>
- ------------------
See Notes to Financial Statements.
8
<PAGE>
Statement of Operations
For the Year Ended September 30, 1998
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
INTEREST........................................................................................ $3,514,055
EXPENSES:
Management fee................................................................ $ 315,590
Distribution and service fees................................................. 150,403
Shareholder account services.................................................. 89,399
Auditing and legal fees....................................................... 41,032
Shareholder reports and communications........................................ 28,193
Registration.................................................................. 15,143
Custody and related services.................................................. 10,564
Directors' fees and expenses.................................................. 2,240
Miscellaneous................................................................. 3,985
----------
TOTAL EXPENSES.................................................................................. 656,549
----------
NET INVESTMENT INCOME........................................................................... 2,857,506
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain on investments.............................................. 795,284
Net change in unrealized appreciation of investments.......................... 1,665,711
----------
NET GAIN ON INVESTMENTS......................................................................... 2,460,995
----------
INCREASE IN NET ASSETS FROM OPERATIONS.......................................................... $5,318,501
==========
- ------------------
See Notes to Financial Statements.
</TABLE>
9
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------------
OPERATIONS: 1998 1997
----------- -----------
<S> <C> <C>
Net investment income................................................................. $ 2,857,506 $ 3,190,601
Net realized gain on investments...................................................... 795,284 640,851
Net change in unrealized appreciation of investments.................................. 1,665,711 1,107,067
----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS................................................ 5,318,501 4,938,519
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A............................................................................ (2,793,695) (3,147,677)
Class D............................................................................ (63,811) (42,924)
Net realized gain on investments:
Class A............................................................................ (662,511) (2,166,159)
Class D............................................................................ (13,845) (33,218)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS............................................. (3,533,862) (5,389,978)
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------------------------------
YEAR ENDED SEPTEMBER 30,
------------------------------
CAPITAL SHARE TRANSACTIONS: 1998 1997
----------- -----------
<S> <C> <C> <C> <C>
Net proceeds from sale of shares:
Class A........................................ 351,084 945,721 2,673,614 7,009,688
Class D........................................ 35,932 63,366 277,146 479,673
Shares issued in payment of dividends:
Class A........................................ 211,791 243,739 1,609,925 1,811,306
Class D........................................ 6,154 4,274 47,336 32,136
Exchanged from associated Funds:
Class A........................................ 376,982 411,620 2,858,633 3,035,982
Class D........................................ 74,609 2,882 573,703 22,069
Shares issued in payment of gain distributions:
Class A........................................ 66,337 215,373 496,199 1,595,916
Class D........................................ 1,655 3,939 12,516 29,503
----------- ----------- ----------- -----------
Total............................................. 1,124,544 1,890,914 8,549,072 14,016,273
----------- ----------- ----------- -----------
Cost of shares repurchased:
Class A........................................ (1,024,527) (1,964,212) (7,783,891) (14,557,171)
Class D........................................ (84,855) (54,046) (653,515) (408,164)
Exchanged into associated Funds:
Class A........................................ (322,964) (290,897) (2,454,147) (2,146,414)
Class D........................................ -- (2,553) -- (19,210)
----------- ----------- ----------- -----------
Total............................................. (1,432,346) (2,311,708) (10,891,553) (17,130,959)
----------- ----------- ----------- -----------
DECREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS............................. (307,802) (420,794) (2,342,481) (3,114,686)
========== ========== ---------- ----------
DECREASE IN NET ASSETS................................................................ (557,842) (3,566,145)
NET ASSETS:
Beginning of year..................................................................... 63,878,732 67,444,877
----------- -----------
END OF YEAR........................................................................... $63,320,890 $63,878,732
=========== ===========
- ------------------
See Notes to Financial Statements.
</TABLE>
10
<PAGE>
Notes to Financial Statements
1. MULTIPLE CLASSES OF SHARES -- Seligman New Jersey Municipal Fund, Inc. (the
"Fund") offers two classes of 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 charge ("CDSC") of 1% on redemptions within 18 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 CDSC of 1% imposed on 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. SIGNIFICANT ACCOUNTING POLICIES -- 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. SECURITY VALUATION --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 approved by the Board of Directors.
Short-term holdings maturing in 60 days or less are generally valued at
amortized cost.
B. FEDERAL TAXES -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are recorded on trade dates. Identified cost of investments
sold is used for both financial statement and federal income tax purposes.
Interest income is recorded on the accrual basis. The Fund amortizes
original issue discounts and premiums paid on purchases of portfolio
securities. Discounts other than original issue discounts are not amortized.
D. MULTIPLE CLASS ALLOCATIONS -- 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 the
shares 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 year ended
September 30, 1998, distribution and service fees were the only
class-specific expenses.
E. DISTRIBUTIONS TO SHAREHOLDERS -- Dividends are declared daily and paid
monthly. Other distributions paid by the Fund are recorded on the
ex-dividend date. The treatment for financial statement purposes of
distributions made to shareholders 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, or 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 SECURITIES -- Purchases and sales of portfolio
securities, excluding short-term investments, for the year ended September 30,
1998, amounted to $14,639,775 and $17,505,975, respectively.
At September 30, 1998, 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 of investments
amounted to $4,701,846.
4. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities.
11
<PAGE>
Notes to Financial Statements
Compensation of all officers of the Fund, all directors of the Fund who are
employees or consultants of the Manager, and all personnel of the Fund and the
Manager, is paid by the Manager. The Manager's fee, calculated daily and payable
monthly, is equal to 0.50% per annum of the Fund's average daily net assets.
Seligman Advisors, Inc. (the "Distributor") (formerly Seligman Financial
Services, Inc.), agent for the distribution of the Fund's shares and an
affiliate of the Manager, received concessions of $8,550 for sales of Class A
shares, after commissions of $64,487 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 year ended September 30,
1998, fees incurred aggregated $133,429, or 0.22% 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 year ended September 30, 1998, fees incurred under the Plan
amounted to $16,974, or 1% per annum of the average daily net assets of Class D
shares.
The Distributor is entitled to retain any CDSC imposed on redemptions of
Class D shares occurring within one year of purchase and on certain redemptions
of Class A shares occurring within 18 months of purchase. For the year ended
September 30, 1998, such charges amounted to $492.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of shares of the Fund, as well as distribution
and service fees pursuant to the Plan. For the year ended September 30, 1998,
Seligman Services, Inc. received commissions of $362 from the sale of shares of
the Fund. Seligman Services, Inc. also received distribution and service fees of
$10,296, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost $89,399 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of the
Fund or other funds in the Seligman Group of Investment Companies. The cost of
such fees and earnings accrued thereon is included in directors' fees and
expenses, and the accumulated balance thereof at September 30, 1998, of $36,073
is included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
5. COMMITTED LINE OF CREDIT -- Effective July 1, 1998, the Fund entered into a
joint $800 million committed line of credit that is shared by substantially all
funds in the Seligman Group of Investment Companies. The Fund's borrowings are
limited to 10% of its net assets. Borrowings pursuant to the credit facility are
subject to interest at a rate equal to the overnight federal funds rate plus
0.50% on an overnight basis. The Fund incurs a commitment fee of 0.08% per annum
on its share of the unused portion of the credit facility. The credit facility
may be drawn upon only for temporary purposes and is subject to certain other
customary restrictions. The credit facility commitment expires one year from the
date of the agreement but is renewable with the consent of the participating
banks. To date, the Fund has not borrowed from the credit facility.
12
<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, based on average shares
outstanding.
"Total return based on net asset value" measures each Class's performance
assuming 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. Total returns for periods
of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR........................ $7.56 $7.60 $7.59 $7.40 $8.24
----- ----- ----- ----- -----
Net investment income..................................... 0.35 0.36 0.39 0.39 0.41
Net realized and unrealized investment gain (loss)........ 0.30 0.21 0.01 0.29 (0.74)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS............ 0.65 0.57 0.40 0.68 (0.33)
Dividends paid or declared................................ (0.35) (0.36) (0.39) (0.39) (0.41)
Distributions from net gain realized...................... (0.08) (0.25) -- (0.10) (0.10)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE................ 0.22 (0.04) 0.01 0.19 (0.84)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR.............................. $7.78 $7.56 $7.60 $7.59 $7.40
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: 8.87% 7.96% 5.37% 9.77% (4.25)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................ 1.02% 1.06% 1.02% 1.01% 0.90%
Net investment income to average net assets............... 4.54% 4.90% 5.06% 5.29% 5.24%
Portfolio turnover........................................ 23.37% 20.22% 25.65% 4.66% 12.13%
NET ASSETS, END OF YEAR (000s omitted).................... $61,739 $62,597 $66,293 $73,561 $73,942
Without management fee waiver:**
Net investment income per share........................ $0.39 $0.40
Ratios:
Expenses to average net assets......................... 1.06% 1.07%
Net investment income to average net assets............ 5.24% 5.07%
- ------------------
See footnotes on page 14.
</TABLE>
13
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94*
------------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD.................... $7.64 $7.68 $7.67 $7.48 $8.14
----- ----- ----- ----- -----
Net investment income................................... 0.29 0.31 0.33 0.33 0.23
Net realized and unrealized investment gain (loss)...... 0.30 0.21 0.01 0.29 (0.66)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS.......... 0.59 0.52 0.34 0.62 (0.43)
Dividends paid or declared.............................. (0.29) (0.31) (0.33) (0.33) (0.23)
Distributions from net gain realized.................... (0.08) (0.25) -- (0.10) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE.............. 0.22 (0.04) 0.01 0.19 (0.66)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD.......................... $7.86 $7.64 $7.68 $7.67 $7.48
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: 7.97% 7.10% 4.56% 8.79% (5.47)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.......................... 1.80% 1.83% 1.79% 1.89% 1.75%+
Net investment income to average net assets............. 3.76% 4.13% 4.29% 4.45% 4.37%+
Portfolio turnover...................................... 23.37% 20.22% 25.65% 4.66% 12.13%++
NET ASSETS, END OF PERIOD (000s omitted)................ $1,582 $1,282 $1,152 $1,190 $986
Without management fee waiver:**
Net investment income per share...................... $0.33 $0.22
Ratios:
Expenses to average net assets....................... 1.94% 1.87%+
Net investment income to average net assets.......... 4.40% 4.25%+
<FN>
- ------------------
* Commencement of offering of Class D shares.
** During the periods stated, the Manager, at its discretion, waived a portion
of its fees.
+ Annualized.
++ For the year ended September 30, 1994.
</FN>
See Notes to Financial Statements.
</TABLE>
14
<PAGE>
Report of Independent Auditors
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN NEW JERSEY MUNICIPAL FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman New Jersey Municipal Fund, Inc. as of
September 30, 1998, the related statements of operations for the year then ended
and of changes in net assets for each of the years in the two-year period then
ended, 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
September 30, 1998 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 New Jersey
Municipal Fund, Inc. as of September 30, 1998, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
October 30, 1998
15
<PAGE>
Board of Directors
JOHN R. GALVIN 2, 4
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, Raytheon Company
ALICE S. ILCHMAN 3, 4
Trustee, Committee for Economic Development
Chairman, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center
JOHN E. MEROW 2, 4
Retired Chairman and Senior Partner,
Sullivan & Cromwell, Law Firm
Director, Commonwealth Industries, Inc.
Director, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
Trustee, The Geraldine R. Dodge Foundation
Chairman of the Board of Trustees, St. George's School
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, 4
Retired Partner, Pitney, Hardin, Kipp & Szuch,
Law Firm
JAMES Q. RIORDAN 3, 4
Director, KeySpan Energy Corporation
Trustee, Committee for Economic Development
Director, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
Managing Director, Director of Investments,
J. & W. Seligman & Co. Incorporated
Trustee Emeritus, Colby College
ROBERT L. SHAFER 3, 4
Retired Vice President, Pfizer Inc.
JAMES N. WHITSON 2, 4
Director and Consultant, Sammons Enterprises, Inc.
Director, CommScope, Inc.
Director, C-SPAN
BRIAN T. ZINO 1
President
President, J. & W. Seligman & Co. Incorporated
Chairman, Seligman Data Corp.
Director, ICI Mutual Insurance Company
Director Emeritus
FRED E. BROWN
Director and Consultant, J. & W. Seligman & Co. Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
16
<PAGE>
Executive Officers
WILLIAM C. MORRIS
Chairman
BRIAN T. ZINO
President
THOMAS G. MOLES
Vice President
LAWRENCE P. VOGEL
Vice President
THOMAS G. ROSE
Treasurer
FRANK J. NASTA
Secretary
FOR MORE INFORMATION
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 Advisors, 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
(212) 682-7600 Outside the
United States
(800) 622-4597 24-Hour
Automated
Telephone Access Service
17
<PAGE>
Glossary of Financial Terms
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in the fund's portfolio. For tax purposes,
these profits may be taxed at different rates, primarily depending upon the
length of time the securities were owned by the fund.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund (the
CDSC expires after a fixed time period).
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.
(NASD) -- A self-regulatory body with authority over firms that distribute
mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE (OP) -- The price at which a mutual fund's share can be
purchased. The offering price per share is the current net asset value plus any
sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, officers and directors, how shares are bought and
redeemed, fund fees and other charges, and the fund's financial statements.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains updated or more
detailed information about an investment company and that supplements the
prospectus. It is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The Average Annual Total
Return represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- -----------------
Adapted from the Investment Company Institute's 1998 Mutual Fund Fact Book.
18
<PAGE>
SELIGMAN ADVISORS, INC.
an affiliate of
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman New Jersey Municipal Fund, Inc., which contains information about the
sales charges, management fee, and other costs. Please read the prospectus
carefully before investing or sending money.
TECNJ2 9/98
SELIGMAN
New Jersey
Municipal Fund, Inc.
Annual Report
September 30, 1998
Providing Income
Exempt From Regular
Income Tax
