To the Shareholders
The fiscal year ended September 30, 1999, was a period of steadily rising
interest rates, creating a difficult environment for fixed-income securities and
for Seligman New Jersey Municipal Fund.
At the end of the Fund's fiscal-year 1998, the Federal Reserve Board was easing
monetary policy in an effort to protect the US economy from the effects of the
global economic crisis. Central banks around the world also lowered key interest
rates in response to global turmoil. These easing actions were successful and
the world economy rebounded. However, the global recovery, combined with
continued growth in the US, soon caused the US Fed to voice concerns about
inflation. In May, the Fed announced its bias toward a tighter policy and has
since followed through with two federal funds rate hikes, for a total of 50
additional basis points.
Throughout this fiscal year, continued robust growth in the US, the recovering
world economy, growing concerns regarding inflation, and tighter monetary
policy, sent market interest rates steadily higher. On September 30, 1998, the
30-year US Treasury bond was yielding 4.98%. One year later, the yield had moved
to 6.06%. The New Jersey State general obligation 30-year municipal bond
fluctuated within a narrower range, but still rose significantly, from 4.75% on
September 30, 1998, to 5.68% on September 30, 1999. The additional stability in
the New Jersey municipal market was largely the result of an imbalance in
municipal supply and demand. For much of the past year, rising yields were
attracting investors, while municipal issuers were reluctant to offer new supply
at higher rates.
Looking ahead, we believe that the US economy will slow, as was intended by the
Fed's most recent actions, and that inflation fears will thus subside and reduce
bond market volatility. We anticipate that the municipal market will outperform
the Treasury market for the balance of calendar-year 1999, as a result of
improving municipal market fundamentals, the most significant of which is the
slowdown in municipal issuance, which is expected to continue into the new year.
As the millennium approaches, we have become concerned that the media's focus on
the Year 2000 (Y2K) computer issue, and the fears that this attention may spark,
will cause some investors to take actions that are not in their best long-term
interests. In our view, the primary danger to investors is losing sight of their
long-term financial goals and altering their portfolios and asset allocations in
an attempt to respond to the confusion surrounding this issue.
In the US, governments and businesses have committed substantial resources to
this issue and, while there may be scattered inconveniences, we believe that the
US will enter the year 2000 relatively seamlessly, and that much of the rest of
the developed world is also well positioned to deal with the new millennium.
For the past several years, J. & W. Seligman & Co. Incorporated (Seligman), your
Fund's manager, and Seligman Data Corp. (Seligman Data), your Fund's shareholder
service agent, have been working to ensure that shareholders do not experience
any Y2K-related inconveniences at Seligman. We are pleased to report that the
early start has paid off. During the spring of this year, Seligman and Seligman
Data participated in Y2K testing conducted by the Securities Industry
Association. These tests were completed without any Y2K-related problems on the
part of Seligman or Seligman Data. Tests with key service providers were also
conducted, all of which were successfully completed in a Y2K environment.
We appreciate your confidence in Seligman New Jersey Municipal Fund and look
forward to serving your investment needs for many years to come. A discussion
with your Portfolio Manager, as well as the Fund's portfolio of investments and
financial statements, follows 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
November 5, 1999
1
<PAGE>
Interview With Your Portfolio Manager,
Thomas G. Moles
Q: What economic and market factors influenced Seligman New Jersey Municipal
Fund in the last 12 months?
A: The past 12 months have been challenging for the financial markets, including
the fixed-income markets. At this time last year, global equity markets were
struggling to recover from the Asian financial crisis, as well as economic
turmoil in Russia. In September 1998, the Federal Reserve Board initiated a
series of federal funds rate easings in an effort to restore stability and
liquidity to anxious world markets. At that time, market participants
generally expected that US economic growth would contract as a result of
world events, thereby preventing an acceleration in the rate of inflation.
Additionally, many experts predicted that, with the approach of the new
millennium, computer glitches would at best slow economic growth and at worst
cause major disruptions leading to worldwide recession. One year later, the
Fed has tightened to slow economic growth, world equity markets have
recovered, and most market watchers expect the transition to the year 2000 to
be uneventful.
During the past year, the municipal market did not exhibit the degree of
volatility that characterized the US Treasury market. This was largely the
result of the powerful influences of supply and demand that served to
mitigate both upward and downward movements in municipal yields. Last year's
Treasury market rallies were caused by heavy demand for Treasury securities
during periods of equity market declines. Conversely, demand for municipal
bonds was not greatly affected, which lessened municipal market volatility.
Further, year-to-date municipal issuance is down 20% over the same period
last year. This lack of supply held municipal yields steady and was the
primary reason municipal bonds outperformed Treasury bonds for much of the
past 12 months.
While the municipal market was relatively stable overall, it was not immune
to the effects of shifting economic and inflation expectations. By June 1999,
municipal yields began moving higher in response to increasing concern
regarding the pace of economic activity and continued to move higher through
fiscal year end. Accordingly, net asset values of the Fund's shares
deteriorated during the last quarter of the fiscal year and performance was
disappointing.
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.
Seligman Municipals Team: (standing 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 was your investment strategy?
A: Over the past year, long-term municipal yields rose to levels not seen in
several years. This presented an opportunity to enhance Fund yields by
purchasing higher-yielding, longer-term bonds and by reducing positions in
shorter-term bonds. In general, the longer the maturity of a bond, the more
sensitive it is to changes in interest rates. During periods of declining
interest rates, longer-term bonds outperform shorter-term bonds. However,
during periods of rising interest rates, such as we have been experiencing,
longer-term bonds decline more in price than shorter-term bonds.
New purchases were concentrated in higher-rated bonds due primarily to a
continuation of narrow yield spreads between higher- and lower-quality bonds.
Additionally, a number of holdings received credit-rating upgrades, further
contributing to the overall improvement in the Fund's credit quality.
The Fund is well diversified among all major sectors of the municipal
marketplace. Most sectors remain stable with the exception of health care,
which remains vulnerable to further credit-quality deterioration mainly as a
result of government cutbacks and the growth of managed care. Many health
care issuers that have been well managed and have maintained consistently
healthy finances are suddenly facing serious budget deficits. As a result of
this alarming trend, we have been particularly diligent in monitoring our
health care holdings. Despite the current situation, the health care sector
continues to offer selective opportunities. Through in-depth credit analysis,
we endeavor to identify strong health care credits for inclusion in the
Fund's portfolio. Currently, Seligman New Jersey Municipal Fund has 17% of
assets in health care issues, the majority of which are insured and rated
AAA. The balance are investment grade.
Q: What is your outlook?
A: The long-awaited economic slowdown has yet to materialize, increasing the
risk that the rate of inflation will accelerate. In response, bond yields
have been rising steadily year to date. For the remainder of calendar year
1999, the bond markets will likely experience continued volatility until
solid signs that the economy is moderating emerge. Many market participants
expect the Fed to raise rates once more before year-end. This, together with
higher market rates, may ease inflationary pressures and spark a bond-market
rally.
As we head toward the new millennium, we believe that there is much to be
optimistic about. In the year 2000, the US economy will likely enter its
tenth year of expansion, an extraordinary achievement. The financial well
being of the nation's states, cities, and municipalities continues to
improve, with many reporting record budget surpluses. The jobless rate
remains below 5% nationally and consumer confidence remains high. Finally, as
one of the few remaining possible ways to shelter income, municipal bond
funds currently offer attractive yields compared to the after-tax yields of
many taxable bond investments.
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, and assumes that all distributions within the period are invested
in additional shares for the 10-year period ended September 30, 1999, to a
$10,000 hypothetical investment made in the Lehman Brothers Municipal Bond Index
(Lehman Index) for the same period. The performances of Seligman New Jersey
Municipal Fund Class C and Class D shares are not shown in this chart but are
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 Without
Charge Sales Charge Lehman Index
9/30/89 $9,522 $10,000 $10,000
12/31/89 $9,881 $10,377 $10,384
3/31/90 $9,859 $10,354 $10,431
6/30/90 $10,099 $10,606 $10,675
9/30/90 $10,002 $10,504 $10,681
12/31/90 $10,550 $11,080 $11,142
3/31/91 $10,768 $11,309 $11,393
6/30/91 $10,993 $11,545 $11,636
9/30/91 $11,400 $11,972 $12,089
12/31/91 $11,715 $12,303 $12,495
3/31/92 $11,698 $12,285 $12,532
6/30/92 $12,219 $12,833 $13,009
9/30/92 $12,505 $13,133 $13,353
12/31/92 $12,767 $13,408 $13,596
3/31/93 $13,260 $13,925 $14,101
6/30/93 $13,779 $14,471 $14,562
9/30/93 $14,258 $14,974 $15,054
12/31/93 $14,347 $15,067 $15,265
3/31/94 $13,539 $14,219 $14,427
6/30/94 $13,618 $14,302 $14,587
9/30/94 $13,653 $14,338 $14,686
12/31/94 $13,464 $14,140 $14,475
3/31/95 $14,377 $15,099 $15,498
6/30/95 $14,661 $15,397 $15,871
9/30/95 $14,987 $15,739 $16,329
12/31/95 $15,560 $16,341 $17,001
3/31/96 $15,290 $16,058 $16,796
6/30/96 $15,447 $16,223 $16,925
9/30/96 $15,791 $16,584 $17,314
12/31/96 $16,089 $16,897 $17,756
3/31/97 $16,002 $16,806 $17,715
6/30/97 $16,513 $17,342 $18,326
9/30/97 $17,047 $17,903 $18,879
12/31/97 $17,526 $18,406 $19,391
3/31/98 $17,702 $18,591 $19,614
6/30/98 $18,000 $18,904 $19,912
9/30/98 $18,559 $19,491 $20,524
12/31/98 $18,578 $19,511 $20,647
3/31/99 $18,702 $19,641 $20,830
6/30/99 $18,361 $19,283 $20,462
9/30/99 $17,993 $18,897 $20,380
The performances of Class C and 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, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
------------------------------------------------------
CLASS C CLASS D
SINCE SINCE
INCEPTION SIX ONE FIVE 10 INCEPTION
5/27/99* MONTHS* YEAR YEARS YEARS 2/1/94
----------- --------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Class A**
With Sales Charge n/a (8.38)% (7.68)% 4.65% 6.05% n/a
Without Sales Charge n/a (3.79) (3.05) 5.68 6.57 n/a
Class C**
With Sales Charge and CDSC (5.28)% n/a n/a n/a n/a n/a
Without Sales Charge and CDSC (3.33) n/a n/a n/a n/a n/a
Class D**
With 1% CDSC n/a (5.03) (4.49) n/a n/a n/a
Without CDSC n/a (4.09) (3.57) 4.87 n/a 3.26%
Lehman Index*** (1.83)+ (2.16) (0.70) 6.77 7.38 5.02++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended September 30, 1999
9/30/99 3/31/99 9/30/98 DIVIDENDS0 CAPITAL GAIN0 SEC YIELD00
-------- -------- -------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $7.13 $7.58 $7.78 Class A $0.327 $0.096 4.29%
Class C 7.22 n/a n/a Class C 0.095 -- 3.72
Class D 7.22 7.67 7.86 Class D 0.273 0.096 3.75
</TABLE>
Holdings by Market Sector++ MOODY'S/S&P RATINGS++
Revenue Bonds 73% Aaa/AAA 54%
General Obligation Bonds++ 27 Aa/AA 19
WEIGHTED AVERAGE MATURITY 22.7 years A/A 18
Baa/BBB 9
------------------
*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 C shares are calculated with and
without the effect of the initial 1% maximum sales charge and the 1%
contingent deferred sales charge ("CDSC") that is charged on redemptions
made within 18 months of the date of purchase. Returns for Class D shares
are calculated with and without the effect of the 1% 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. It is composed of approximately 60% revenue bonds and 40%
state government obligations. Investors cannot invest directly in an index.
+From 5/31/99.
++From 1/31/94.
0Represents per share amount paid or declared for the year ended September
30, 1999 (for Class C shares, for the period May 27, 1999 to September 30,
1999).
00Current yield, representing the annualized yield for the 30-day period ended
September 30, 1999, has been computed in accordance with SEC regulations and
will vary.
++Percentages based on market values of long-term holdings at September 30,
1999.
++Includes pre-refunded securities.
5
<PAGE>
Portfolio of Investments
September 30, 1999
<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 12/1/20120..... Aaa/AAA $ 2,708,100
3,000,000 Howell Township, NJ GOs, 6.80% due 1/1/2014 ..................................... Aaa/AAA 3,190,260
3,000,000 Middletown, NJ Board of Education School GOs, 5.80% due 8/1/2019 ................ Aaa/AAA 3,031,680
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 2,016,200
3,000,000 New Jersey Economic Development Authority Gas Facilities Rev.
(NUI Corporation Project), 5.70% due 6/1/2032* ............................... Aaa/AAA 2,982,120
2,900,000 New Jersey Economic Development Authority Sewage Facilities Rev.
(Anheuser-Busch Project), 5.85% due 12/1/2030* ............................... A1/A+ 2,909,048
1,000,000 New Jersey Economic Development Authority Water Facilities Rev.
(Middlesex Water Co. Project), 5.20% due 10/1/2022 ........................... Aaa/AAA 934,900
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 2,835,030
3,000,000 New Jersey Educational Facilities Financing Authority Rev.
(Institute for Advanced Study), 5% due 7/1/2021 .............................. Aaa/AA+ 2,729,370
2,000,000 New Jersey Educational Facilities Financing Authority Rev.
(Princeton University), 6% due 7/1/20240...................................... Aaa/AAA 2,129,560
1,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(The Medical Center at Princeton), 5% due 7/1/2028 ........................... Aaa/AAA 884,820
3,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Hackensack University Medical Center), 5.20% due 1/1/2028 ................... Aaa/AAA 2,750,310
3,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Holy Name Hospital), 6% due 7/1/2025 ........................................ NR/BBB+ 2,891,610
2,255,000 New Jersey Health Care Facilities Financing Authority Rev. (Meridian Health
System Obligated Group), 5 3/8% due 7/1/2024 ................................. Aaa/AAA 2,152,442
1,500,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
6% due 10/1/2021* ............................................................ Aaa/AAA 1,514,040
1,000,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
5.90% due 10/1/2029* ......................................................... Aaa/AAA 988,900
3,000,000 New Jersey State GOs, 5 5/8% due 7/15/20150 ..................................... Aa1/AA+ 3,185,130
3,000,000 Port Authority of New York & New Jersey Consolidated Rev.,
5 3/4% due 6/15/2030 ......................................................... A1/AA- 2,991,120
<FN>
------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal alternative minimum tax.
0 Pre-refunded security.
See notes to financial statements.
</FN>
</TABLE>
6
<PAGE>
Portfolio of Investments (continued)
September 30, 1999
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- ------------------- -------------- -----------
<S> <C> <C> <C>
$2,000,000 Puerto Rico Highway & Transportation Authority Rev., 51 1/42% due 7/1/2036 ...... Baa1/A $ 1,909,000
2,500,000 Rutgers State University, NJ, 5.20% due 5/1/2027 ................................ A1/AA 2,314,050
2,500,000 Salem County, NJ Improvement Authority Rev. (Correctional Facility
& Courthouse Annex), 5.70% due 5/1/2017 ...................................... Aaa/AAA 2,512,900
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- 2,550,025
1,250,000 South Jersey Port Corporation, NJ Marine Terminal Rev., 5.60% due 1/1/2023....... NR/A+ 1,219,263
-----------
TOTAL MUNICIPAL BONDS (COST $53,183,447)--97.6% ............................................................ 53,329,878
VARIABLE RATE DEMAND NOTES (COST $600,000)--1.1% ........................................................... 600,000
OTHER ASSETS LESS LIABILITIES--1.3% ........................................................................ 739,123
-----------
NET ASSETS--100.0% ......................................................................................... $54,669,001
===========
<FN>
------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal alternative minimum tax.
See notes to financial statements.
</FN>
</TABLE>
7
<PAGE>
Statement of Assets and Liabilities
September 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments, at value:
Long-term holdings (Cost $53,183,447).......... $53,329,878
Short-term holdings (Cost $600,000)............ 600,000 $53,929,878
-----------
Cash................................................................. 45,749
Interest receivable.................................................. 897,675
Receivable for Capital Stock sold.................................... 10,664
Expenses prepaid to shareholder service agent........................ 7,939
Other................................................................ 1,868
-----------
Total Assets......................................................... 54,893,773
-----------
LIABILITIES:
Dividends payable.................................................... 74,915
Payable for Capital Stock repurchased................................ 27,172
Accrued expenses and other........................................... 122,685
-----------
Total Liabilities.................................................... 224,772
-----------
Net Assets........................................................... $54,669,001
===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($.001 par value; 100,000,000 shares authorized;
7,660,160 shares outstanding):
Class A........................................................... $ 7,428
Class C........................................................... 18
Class D........................................................... 215
Additional paid-in capital........................................... 54,275,958
Undistributed net realized gain...................................... 238,951
Net unrealized appreciation of investments........................... 146,431
-----------
Net Assets........................................................... $54,669,001
===========
NET ASSET VALUE PER SHARE:
Class A ($52,991,734 / 7,427,735 shares)............................. $7.13
=====
Class C ($127,383 / 17,652 shares)................................... $7.22
=====
Class D ($1,549,884 / 214,773 shares)................................ $7.22
=====
</TABLE>
------------------
See notes to financial statements.
8
<PAGE>
Statement of Operations
For the Year Ended September 30, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................................. $ 3,237,933
EXPENSES:
Management fee............................................. $ 298,783
Distribution and service fees.............................. 164,425
Shareholder account services............................... 90,723
Auditing and legal fees.................................... 40,436
Registration............................................... 19,524
Directors' fees and expenses............................... 12,318
Custody and related services............................... 11,539
Shareholder reports and communications..................... 10,149
Miscellaneous.............................................. 4,709
---------
Total Expenses............................................................ 652,606
-----------
Net Investment Income..................................................... 2,585,327
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments........................... 257,481
Net change in unrealized appreciation of investments....... (4,555,415)
---------
Net Loss on Investments................................................... (4,297,934)
-----------
Decrease in Net Assets from Operations.................................... $(1,712,607)
===========
</TABLE>
------------------
See notes to financial statements.
9
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------
1999 1998
------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income.......................................................... $ 2,585,327 $ 2,857,506
Net realized gain on investments............................................... 257,481 795,284
Net change in unrealized appreciation of investments........................... (4,555,415) 1,665,711
----------- -----------
Increase (Decrease) in Net Assets from Operations.............................. (1,712,607) 5,318,501
----------- -----------
Distributions to shareholders:
Net investment income:
Class A..................................................................... (2,521,489) (2,793,695)
Class C..................................................................... (947) --
Class D..................................................................... (62,891) (63,811)
Net realized gain on investments:
Class A..................................................................... (744,909) (662,511)
Class D..................................................................... (21,499) (13,845)
----------- -----------
Decrease in Net Assets from Distributions...................................... (3,351,735) (3,533,862)
----------- -----------
Shares
-----------------------------------
Year Ended September 30,
-----------------------------------
1999 1998
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class A.................................. 196,843 351,084 1,478,334 2,673,614
Class C.................................. 17,577 -- 130,877 --
Class D.................................. 36,898 35,932 282,964 277,146
Shares issued in payment of dividends:
Class A.................................. 188,091 211,791 1,411,854 1,609,925
Class C.................................. 75 -- 549 --
Class D.................................. 4,681 6,154 35,612 47,336
Exchanged from associated Funds:
Class A.................................. 993,398 376,982 7,441,980 2,858,633
Class C.................................. -- -- -- --
Class D.................................. 36,753 74,609 286,110 573,703
Shares issued in payment of gain distributions:
Class A.................................. 70,420 66,337 535,893 496,199
Class C.................................. -- -- -- --
Class D.................................. 2,248 1,655 17,285 12,516
---------- ---------- ----------- -----------
Total 1,546,984 1,124,544 11,621,458 8,549,072
---------- ---------- ----------- -----------
Cost of shares repurchased:
Class A.................................. (968,501) (1,024,527) (7,276,733) (7,783,891)
Class C.................................. -- -- -- --
Class D.................................. (67,008) (84,855) (505,987) (653,515)
Exchanged into associated Funds:
Class A.................................. (992,358) (322,964) (7,426,285) (2,454,147)
Class C.................................. -- -- -- --
Class D.................................. -- -- -- --
---------- ---------- ----------- -----------
Total....................................... (2,027,867) (1,432,346) (15,209,005) (10,891,553)
---------- ---------- ----------- -----------
Decrease in Net Assets from Capital
Share Transactions....................... (480,883) (307,802) (3,587,547) (2,342,481)
========== ========== ----------- -----------
Decrease in Net Assets.......................................................... (8,651,889) (557,842)
NET ASSETS:
Beginning of year............................................................... 63,320,890 63,878,732
----------- -----------
End of Year..................................................................... $54,669,001 $63,320,890
=========== ===========
</TABLE>
------------------
* The Fund began offering Class C shares on May 27, 1999.
See notes to financial statements.
10
<PAGE>
Notes to Financial Statements
1. Multiple Classes of Shares -- Seligman New Jersey Municipal Fund, Inc. (the
"Fund") offers three 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. The
Fund began offering Class C shares on May 27, 1999. Class C shares are sold with
an initial sales charge of up to 1% and 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, if
applicable, of 1% imposed on redemptions made 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, if applicable, of 1% imposed on redemptions made within one
year of purchase. The three 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, 1999,
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
reclassifica tions will have no effect on net assets,
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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,
1999, amounted to $3,231,999 and $7,481,291, respectively.
At September 30, 1999, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
investments amounted to $1,129,939 and $983,508, respectively.
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. 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"), agent for the distribution of
the Fund's shares and an affiliate of the Manager, received concessions of
$5,986 for sales of Class A shares. Commissions of $43,465 and $1,330 were paid
to dealers for sales of Class A and Class C shares, respectively.
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,
1999, fees incurred aggregated $146,701, or 0.25% per annum of the average daily
net assets of Class A shares.
Under the Plan, with respect to Class C and 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 C and 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, 1999, fees incurred under the Plan amounted to $253 and $17,471,
for Class C and Class D shares, respectively, which is equivalent to 1% per
annum of the average daily net assets of each class.
The Distributor is entitled to retain any CDSC imposed on certain redemptions
of Class A and Class C shares occurring within 18 months of purchase and on
redemptions of Class D shares occurring within one year of purchase. For the
year ended September 30, 1999, such charges amounted to $434.
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, 1999,
Seligman Services, Inc. received commissions of $2,734 from the sale of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $11,293, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost $90,723 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
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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, 1999, of $41,356 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 -- The Fund is a participant in a joint $750 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 in June 2000, but is
renewable annually with the consent of the participating banks. For the year
ended September 30, 1999, the Fund had not borrowed from the credit facility.
13
<PAGE>
Financial Highlights
The tables below are intended to help you understand each Class's financial
performance for the past five years or from its inception if less than five
years. Certain information reflects financial results for a single share of a
Class that was held throughout the periods shown. Per share amounts are
calculated using average shares outstanding during the period. "Total return"
shows the rate that you would have earned (or lost) on an investment in each
Class, assuming you reinvested all your dividend and capital gain distributions.
Total returns do not reflect any sales charges and are not annualized for
periods of less than one year.
<TABLE>
<CAPTION>
CLASS A CLASS C
-------------------------------------------------------- -----------------
YEAR ENDED SEPTEMBER 30, 5/27/99*
-------------------------------------------------------- TO
1999 1998 1997 1996 1995 9/30/99
---------- --------- --------- --------- ------- -----------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net Asset Value, Beginning of Period............. $7.78 $7.56 $7.60 $7.59 $7.40 $7.58
----- ----- ----- ----- ----- -----
Income from Investment Operations:
Net investment income............................ 0.33 0.35 0.36 0.39 0.39 0.09
Net realized and unrealized investment gain (loss)
on investments................................. (0.55) 0.30 0.21 0.01 0.29 (0.36)
----- ----- ----- ----- ----- -----
Total from Investment Operations................. (0.22) 0.65 0.57 0.40 0.68 (0.27)
----- ----- ----- ----- ----- -----
Less Distributions:
Dividends from net investment income............. (0.33) (0.35) (0.36) (0.39) (0.39) (0.09)
Distributions from net realized capital gain..... (0.10) (0.08) (0.25) -- (0.10) --
----- ----- ----- ----- ----- -----
Total Distributions.............................. (0.43) (0.43) (0.61) (0.39) (0.49) (0.09)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period................... $7.13 $7.78 $7.56 $7.60 $7.59 $7.22
===== ===== ===== ===== ===== =====
Total return: (3.05)% 8.87% 7.96% 5.37% 9.77% (3.33)%
Ratios/Supplemental Data:
Net Assets, end of period (000s omitted)......... $52,992 $61,739 $62,597 $66,293 $73,561 $127
Ratio of expenses to average net assets.......... 1.07% 1.02% 1.06% 1.02% 1.01% 1.82%+
Ratio of net income to average net assets........ 4.35% 4.54% 4.90% 5.06% 5.29% 3.71%+
Portfolio turnover rate.......................... 5.55% 23.37% 20.22% 25.65% 4.66% 5.55%++
Without management fee waiver:**
Ratio of expenses to average net assets.......... 1.06%
Ratio of net income to average net assets........ 5.24%
</TABLE>
------------------
See footnotes on page 15.
14
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------
1999 1998 1997 1996 1995
---------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net Asset Value, Beginning of Year................. $7.86 $7.64 $7.68 $7.67 $7.48
----- ----- ----- ----- -----
Income from Investment Operations:
Net investment income.............................. 0.27 0.29 0.31 0.33 0.33
Net realized and unrealized investment gain (loss)
on investments................................... (0.54) 0.30 0.21 0.01 0.29
----- ----- ----- ----- -----
Total from Investment Operations................... (0.27) 0.59 0.52 0.34 0.62
----- ----- ----- ----- -----
Less Distributions:
Dividends from net investment income............... (0.27) (0.29) (0.31) (0.33) (0.33)
Distributions from net realized capital gain....... (0.10) (0.08) (0.25) -- (0.10)
----- ----- ----- ----- -----
Total Distributions................................ (0.37) (0.37) (0.56) (0.33) (0.43)
----- ----- ----- ----- -----
Net Asset Value, End of Year....................... $7.22 $7.86 $7.64 $7.68 $7.67
===== ===== ===== ===== =====
Total return: (3.57)% 7.97% 7.10% 4.56% 8.79%
Ratios/Supplemental Data:
Net Assets, end of year (000s omitted)............. $1,550 $1,582 $1,282 $1,152 $1,190
Ratio of expenses to average net assets............ 1.82% 1.80% 1.83% 1.79% 1.89%
Ratio of net income to average net assets.......... 3.60% 3.76% 4.13% 4.29% 4.45%
Portfolio turnover rate............................ 5.55% 23.37% 20.22% 25.65% 4.66%
Without management fee waiver:**
Ratio of expenses to average net assets............ 1.94%
Ratio of net income to average net assets.......... 4.40%
<FN>
------------------
* Commencement of offering of Class C shares.
** During the periods stated, the Manager, at its discretion, waived a portion of its fees.
+ Annualized.
++ For the year ended September 30, 1999.
See Notes to Financial Statements.
</FN>
</TABLE>
15
<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, 1999, 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 confir mation of securities owned as of
September 30, 1999 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 referred to
above present fairly, in all material respects, the financial position of
Seligman New Jersey Municipal Fund, Inc. as of September 30, 1999, the results
of its operations, the changes in its net assets, and the financial highlights
for the respective stated periods in conformity with generally accepted
accounting principles.
/s/ DELOITTE & TOUCHE LLP
-------------------------
DELOITTE & TOUCHE LLP
New York, New York
November 5, 1999
16
<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
Director, Conoco, Inc.
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
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. In cor po rat ed
Trustee Emeritus, Colby College
Robert L. Shafer 3, 4
Retired Vice President, P1/2zerInc.
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
Member of the Board of Governors,
Investment Company Institute
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
17
<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
18
<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 -- The price at which a mutual fund's share can be purchased. The
offering price is the current net asset value per share 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 the fund's investment objective and policies,
services, investment restrictions, how shares are bought and sold, fund fees and
other charges, and the fund's financial highlights.
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 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 fund 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 maximum offering price of the stock.
-------------------
Adapted from the Investment Company Institute's 1999 Mutual Fund Fact Book.
19
<PAGE>
SELIGMAN
-------------------
NEW JERSEY
MUNICIPAL FUND, INC.
Annual Report
September 30, 1999
Providing Income
Exempt From Regular
Income Tax
SELIGMAN ADVISORS, INC.
an affiliate of
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.
TECNJ3 9/99
