TO THE SHAREHOLDERS
The past six months were difficult for fixed-income securities, including
municipal bonds. The continued strong pace of the US economic expansion -- which
in February became the longest in US history -- has caused the Federal Reserve
Board to act on its concern that the increasing demand for goods and services
would exceed the economy's ability to deliver them. The Federal Reserve Board
feared that this could produce an imbalance that could ignite inflation. In an
attempt to slow the economy and ease inflationary pressures, the Federal Reserve
Board raised the federal funds rate three times during this six-month period.
As short-term interest rates moved higher, and the economy showed no signs of
slowing in response, long-term rates increased significantly, and bond prices
fell accordingly. Municipal bonds, however, fared better than did other
fixed-income securities because of an accompanying slowdown in new-issue supply,
which provided some price support for the municipal market.
During the first quarter of 2000, notwithstanding the increases in short-term
rates, the long-term interest-rate environment improved. This was primarily the
result of investors looking for alternatives to the equity markets, which had
become increasingly volatile during this time.
As yet, it seems that the Federal Reserve Board's actions have not slowed the
economy -- indeed the consumer price index for March indicated a significant
increase in consumer prices. However, we believe that the Federal Reserve
Board's actions will ultimately be successful in keeping inflation at bay. Such
economic cooling should eventually place downward pressure on interest rates,
which could be positive for fixed-income securities over the long term.
In addition to our expectation that the interest-rate environment will
stabilize, we believe that municipal bonds have unique characteristics that
could allow them to deliver positive performance. First, we anticipate that New
Jersey municipal new issuance will remain lower in 2000 than in 1999, which
would create a favorable supply and demand environment. Second, continued
uncertainty in the stock market may prompt investors to consider a wider range
of securities for their portfolios, and municipal bonds, which currently offer
many investors after-tax yield advantages over taxable bonds, may be an
attractive choice. Finally, we believe that recent shifts in the way business is
conducted in the municipal marketplace bode well for the long-term success of
the industry.
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,
financial statements, and performance history, 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
May 5, 2000
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
Thomas G. Moles
Q: What economic and market factors influenced Seligman New Jersey Municipal
Fund during the past six months?
A: The primary factor affecting all fixed-income securities, including
municipal bonds, was the strong economy and the Federal Reserve Board's
response to the continued robust pace of growth. Beginning in 1999, a
number of economic indicators, particularly those related to employment
costs and consumer spending, heightened the Federal Reserve Board's
concern. At the same time, oil prices were on the rise, which exacerbated
inflation worries.
Since June 1999, in an attempt to prevent a resurgence in the rate of
inflation, the Federal Reserve Board has raised the federal funds rate five
times for a total of 125 additional basis points. This increase in
short-term rates pushed long-term yields higher, and bond prices lower.
However, during the first fiscal quarter of 2000, bonds rallied as equity
investors sought stability in the face of volatile equity markets.
Another factor that influenced municipal bond performance was the balance
between supply and demand. Throughout 1999, a combination of rising
municipal bond yields and strong equity market returns pushed demand for
municipal bonds considerably lower. However, weak demand was accompanied by
a slowdown in new municipal issuances. Such issuances were down 21% in 1999
from 1998. Through March 31, 2000, issuances were down 32% versus the same
period last year.
This slowdown in supply helped to stabilize the municipal market during
periods of Treasury market volatility. Over the past six months, long-term
municipal yields, as measured by the Bond Buyer 20-Bond General Obligation
Index, fluctuated within a narrow trading range of approximately 38 basis
points. In contrast, 10-year US Treasury note yields fluctuated within a
much wider range of 90 basis points. On March 31, 2000, long-term municipal
yields were nearly unchanged from those at the Fund's fiscal year end on
September 30, 1999.
The financial condition of the nation's states, cities, and municipalities
continues to improve. Credit- rating upgrades outnumbered downgrades by a
ratio of seven to one for calendar year 1999, and the first quarter of 2000
represented the 18th consecutive quarter in which upgrades exceeded
downgrades. An exception to *2
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: (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
this positive news has been the healthcare sector, which remains under
pressure due to merger activity, government cutbacks, and the growth of
managed care.
Q: Did the municipal market suffer any negative effects from the Year 2000
computer issue?
A: Through the coordinated efforts of governments, businesses, and
individuals, the municipal bond market entered the new millennium
uneventfully. The resources expended to prevent computer glitches may have
contributed to the strong economic reports released over the past six
months.
Q: What was your investment strategy?
A: Over the past six months, long-term municipal yields rose to levels not
seen in nearly two-and-one-half years. While such a rising-rate environment
is unfavorable for bonds, it provided the Fund with buying opportunities to
lock in higher yields for the long term and to reduce positions in
shorter-term and lower-yielding securities.
The higher yields that were available also facilitated our ongoing efforts
to improve call protection for the Fund. Many of the Fund's older,
higher-coupon bonds are at or near their optional call dates. (Callable
bonds can be redeemed by the issuer, prior to maturity on predetermined
dates and at specified prices.) Issuers generally call bonds when interest
rates have declined sufficiently to allow them to refinance outstanding debt
at lower rates. Callable bonds thus pose a potential risk to the Fund's
dividend distributions because the proceeds from a called bond must be
reinvested at prevailing, typically lower, yields. By selectively selling
short-call positions and reinvesting the proceeds when higher yields are
available, we hope to protect the Fund's future dividend distributions.
We believe that as a result of these actions the Fund is better positioned
for the long term. However, during periods of rising interest rates, the
Fund's net asset value declined more than it would have had we chosen to
retain short-term defensive holdings, which are less sensitive to changes in
interest rates.
As a result of the ongoing difficulties in the healthcare sector, we have
been particularly diligent in staying abreast of the current financial
status of our hospital credits. We have sold a number of declining credits
and have replaced them with securities showing greater stability.
Q: What is your outlook?
A: Municipal investment returns for the first quarter of 2000 have been
positive, with the municipal market outperforming the Treasury, agency, and
corporate sectors. We are optimistic that long-term municipal yields have
peaked and expect that the recent downward trend in yields will continue.
However, until the Federal Reserve Board appears satisfied that economic
growth has slowed to an acceptable rate, the bond markets may find it
difficult to sustain a prolonged rally.
Equity market volatility may continue over the near term, prompting some
investors to seek more stable alternatives for at least a portion of their
investment assets. We are optimistic that the municipal market's record of
safety and stability will spark renewed interest in municipal bonds. In
addition, for many investors, municipal securities currently offer after-tax
yield advantages relative to taxable bonds.
We are also encouraged by several long-term developments in the municipal
market, including improved disclosure, greater price transparency, and the
emergence of Internet underwriters and secondary market makers. An open,
accessible municipal market benefits all participants by encouraging
informed decision-making and, in our opinion, is essential for the long-term
viability of the municipal industry.
3
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
Investment Results Per Share
TOTAL RETURNS
For Periods Ended March 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
--------------------------------------------------------------
CLASS C CLASS D
SINCE SINCE
SIX INCEPTION ONE FIVE 10 INCEPTION
MONTHS* 5/27/99* YEAR YEARS YEARS 2/1/94
----------- --------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Class A**
With Sales Charge (3.74)% n/a (7.36)% 3.81% 5.80% n/a
Without Sales Charge 1.12 n/a (2.71) 4.82 6.32 n/a
Class C**
With Sales Charge and CDSC (1.32) (4.98)% n/a n/a n/a n/a
Without Sales Charge and CDSC 0.61 (3.04) n/a n/a n/a n/a
Class D**
With 1% CDSC (0.39) n/a (4.42) n/a n/a n/a
Without CDSC 0.61 n/a (3.50) 4.01 n/a 3.09%
Lehman Brothers
Municipal Bond Index*** 2.13 0.26+ (0.08) 6.08 7.15 4.97++
<CAPTION>
NET ASSET VALUE
DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 2000
3/31/00 9/30/99 3/31/99 DIVIDENDS 0 CAPITAL GAIN 0 SEC YIELD 00
-------- -------- -------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $7.01 $7.13 $7.58 Class A $0.167 $0.032 4.64%
Class C 7.09 7.22 n/a Class C 0.142 0.032 4.00
Class D 7.09 7.22 7.67 Class D 0.142 0.032 4.04
HOLDINGS BY MARKET SECTOR++ MOODY'S/S&P RATINGS++
Revenue Bonds 79% Aaa/AAA 52% A/A 24%
General Obligation Bonds++++ 21 Aa/AA 15 Baa/BBB 9
WEIGHTED AVERAGE MATURITY 24.9 years
<FN>
------------------
* 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 Brothers Municipal Bond 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.
0 Represents per share amount paid or declared for the six months ended
March 31, 2000.
00 Current yield, representing the annualized yield for the 30-day period
ended March 31, 2000, has been computed in accordance with SEC regulations
and will vary.
++ Percentages based on market values of long-term holdings at March 31, 2000.
++++ Includes pre-refunded securities.
</FN>
</TABLE>
4
<PAGE>
PORTFOLIO OF INVESTMENTS
March 31, 2000
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- ------------------- -------------- ------------
<S> <C> <C> <C>
$2,000,000 Howell Township, NJ GOs, 6.80% due 1/1/2014 ............................. Aaa/AAA $ 2,097,120
3,000,000 Middletown, NJ Board of Education School GOs, 5.80% due 8/1/2019 ........ Aaa/AAA 3,030,030
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 2,029,960
3,000,000 New Jersey Economic Development Authority Gas Facilities Rev.
(NUI Corporation Project), 5.70% due 6/1/2032* ....................... Aaa/AAA 2,909,910
2,900,000 New Jersey Economic Development Authority Sewage Facilities Rev.
(Anheuser-Busch Project), 5.85% due 12/1/2030* ....................... A1/A+ 2,871,174
1,000,000 New Jersey Economic Development Authority Water Facilities Rev.
(Middlesex Water Co. Project), 5.20% due 10/1/2022 ................... Aaa/AAA 928,210
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 2,775,420
3,000,000 New Jersey Educational Facilities Financing Authority Rev.
(Institute for Advanced Study), 5% due 7/1/2021 ...................... Aaa/AA+ 2,722,320
2,000,000 New Jersey Educational Facilities Financing Authority Rev.
(Princeton University), 6% due 7/1/2024 0............................. Aaa/AAA 2,088,760
1,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(The Medical Center at Princeton), 5% due 7/1/2028 ................... Aaa/AAA 873,540
3,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Hackensack University Medical Center), 5.20% due 1/1/2028 ........... Aaa/AAA 2,724,150
3,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Holy Name Hospital), 6% due 7/1/2025 ................................ NR/BBB+ 2,572,620
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 2,128,043
2,500,000 New Jersey Highway Authority (Garden State Parkway Senior
Parkway Rev.), 5-5/8% due 1/1/2030.................................... A1/AA- 2,451,975
1,500,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
6% due 10/1/2021* .................................................... Aaa/AAA 1,503,105
1,000,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
5.90% due 10/1/2029* ................................................. Aaa/AAA 1,000,000
1,500,000 New Jersey Housing & Mortgage Finance Agency (Multi-family
Housing Rev.), 6.35% due 11/1/2031*................................... Aaa/AAA 1,517,490
<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>
5
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
March 31, 2000
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- ------------------- -------------- -----------
<S> <C> <C> <C>
$3,000,000 Port Authority of New York & New Jersey Consolidated Rev.,
5-3/4% due 6/15/2030 .................................................. A1/AA- $2,953,230
2,000,000 Puerto Rico Highway & Transportation Authority Rev., 5-1/2% due 7/1/2036 . Baa1/A 1,895,800
2,500,000 Rutgers State University, NJ, 5.20% due 5/1/2027 ........................ A1/AA 2,292,400
2,500,000 Salem County, NJ Improvement Authority Rev. (Correctional Facility
& Courthouse Annex), 5.70% due 5/1/2017 .............................. Aaa/AAA 2,519,125
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- 2,527,375
1,250,000 South Jersey Port Corporation, NJ Marine Terminal Rev., 5.60% due 1/1/2023 NR/A+ 1,209,313
-------------
TOTAL MUNICIPAL BONDS (Cost $50,648,254) -- 97.8% ...................................................... 49,621,070
VARIABLE RATE DEMAND NOTES (Cost $200,000) -- 0.4% ..................................................... 200,000
OTHER ASSETS LESS LIABILITIES -- 1.8% .................................................................. 932,612
-------------
NET ASSETS -- 100.0% ................................................................................... $50,753,682
=============
<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>
6
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
ASSETS:
Investments, at value:
Long-term holdings (Cost $50,648,254)...... $49,621,070
Short-term holdings (Cost $200,000)........ 200,000 $49,821,070
-----------
Cash ...................................................... 110,696
Interest receivable........................................ 898,372
Receivable for Capital Stock sold.......................... 329,289
Expenses prepaid to shareholder service agent.............. 6,312
Other...................................................... 5,883
-----------
Total Assets............................................... 51,171,622
-----------
LIABILITIES:
Payable for Capital Stock repurchased...................... 201,936
Dividends payable.......................................... 97,265
Accrued expenses and other................................. 118,739
-----------
Total Liabilities ......................................... 417,940
-----------
Net Assets................................................. $50,753,682
===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($.001 par value; 100,000,000
shares authorized; 7,235,261 shares outstanding):
Class A................................................. $ 7,069
Class C................................................. 35
Class D................................................. 131
Additional paid-in capital................................. 51,331,664
Undistributed net investment income........................ 1,478
Undistributed net realized gain............................ 440,489
Net unrealized depreciation of investments................. (1,027,184)
-----------
Net Assets................................................. $50,753,682
===========
NET ASSET VALUE PER SHARE:
Class A ($49,577,946 / 7,069,497 shares)................... $7.01
=====
Class C ($249,927 / 35,230 shares)......................... $7.09
=====
Class D ($925,809 / 130,534 shares)........................ $7.09
=====
------------------
See notes to financial statements.
7
<PAGE>
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 2000
INVESTMENT INCOME:
Interest .................................................. $1,533,206
EXPENSES:
Management fee ................................. $ 130,636
Distribution and service fees .................. 64,680
Shareholder account services.................... 44,303
Auditing and legal fees......................... 20,128
Shareholder reports and communications.......... 9,424
Custody and related services .................. 8,386
Directors' fees and expenses.................... 7,536
Registration .................................. 4,660
Miscellaneous................................... 1,179
---------
Total Expenses ............................................ 290,932
----------
Net Investment Income ..................................... 1,242,274
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments ............... 448,425
Net change in unrealized appreciation
of investments................................ (1,173,615)
---------
Net Loss on Investments.................................... (725,190)
----------
Increase in Net Assets from Operations..................... $ 517,084
==========
------------------
See notes to financial statements.
8
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
OPERATIONS:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
3/31/00 9/30/99
------------- -------------
<S> <C> <C>
Net investment income ...................................................... $1,242,274 $2,585,327
Net realized gain on investments ........................................... 448,425 257,481
Net change in unrealized appreciation of investments ....................... (1,173,615) (4,555,415)
----------- -----------
Increase (Decrease) in Net Assets from Operations .......................... 517,084 (1,712,607)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A.................................................................. (1,212,138) (2,521,489)
Class C ................................................................. (3,813) (947)
Class D ................................................................. (24,845) (62,891)
Net realized gain on investments:
Class A.................................................................. (239,878) (744,909)
Class C.................................................................. (793) --
Class D.................................................................. (6,216) (21,499)
----------- -----------
Decrease in Net Assets from Distributions................................... (1,487,683) (3,351,735)
----------- -----------
<CAPTION>
Shares
----------------------------
SIX MONTH YEAR
ENDED ENDED
3/31/00 9/30/99
-------------- ----------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sales of shares:
Class A................................... 195,788 196,843 1,358,278 1,478,334
Class C................................... 19,081 17,577 134,170 130,877
Class D................................... 3,441 36,898 23,960 282,964
Shares issued in payment of dividends:
Class A .................................. 87,530 188,091 605,030 1,411,854
Class C................................... 505 75 3,531 549
Class D .................................. 1,723 4,681 12,062 35,612
Exchanged from associated Funds:
Class A .................................. 485,687 993,398 3,339,602 7,441,980
Class C................................... -- -- -- --
Class D .................................. 5,500 36,753 38,802 286,110
Shares issued in payment of gain distributions:
Class A .................................. 23,538 70,420 165,005 535,893
Class C................................... 112 -- 793 --
Class D................................... 757 2,248 5,373 17,285
-------- --------- ----------- -----------
Total........................................ 823,662 1,546,984 5,686,606 11,621,458
-------- --------- ----------- -----------
Cost of shares repurchased:
Class A .................................. (842,702) (968,501) (5,813,254) (7,276,733)
Class C................................... (2,120) -- (15,007) --
Class D................................... (72,786) (67,008) (507,797) (505,987)
Exchanged into associated Funds:
Class A................................... (308,079) (992,358) (2,136,895) 7,426,285)
Class C................................... -- -- -- --
Class D................................... (22,874) -- (158,373) --
-------- --------- ----------- -----------
Total ....................................... (1,248,561) (2,027,867) (8,631,326) (15,209,005)
--------- --------- ----------- -----------
Decrease in Net Assets from Capital
Share Transactions ....................... (424,899) (480,883) (2,944,720) (3,587,547)
========== ========== ----------- -----------
Decrease in Net Assets...................................................... (3,915,319) (8,651,889)
NET ASSETS:
Beginning of period......................................................... 54,669,001 63,320,890
----------- -----------
End of Period............................................................... $50,753,682 $54,669,001
=========== ===========
<FN>
------------------
* The Fund began offering Class C shares on May 27, 1999.
See notes to financial
statements.
</FN>
</TABLE>
9
<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-specific 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 accounting principles generally accepted in the
United States of America, 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 six months ended March 31, 2000,
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.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
3. Purchases and Sales of Securities -- Purchases and sales of portfolio
securities, excluding short-term investments, for the six months ended March 31,
2000, amounted to $3,890,794 and $6,872,135, respectively.
At March 31, 2000, 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 $558,208 and $1,585,392, 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
$2,086 for sales of Class A shares. Commissions of $16,777 and $1,582 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 six months ended March 31,
2000, fees incurred aggregated $57,487, 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 six months ended
March 31, 2000, fees incurred under the Plan amounted to $942 and $6,251, 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 six
months ended March 31, 2000, such charges amounted to $347.
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 six months ended March 31, 2000,
Seligman Services, Inc. received commissions of $361 from the sale of shares of
the Fund. Seligman Services, Inc. also received distribution and service fees of
$5,034, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost $44,303 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.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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 March 31,
2000, of $40,069 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 six
months ended March 31, 2000, the Fund did not borrow from the credit facility.
12
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance for the past five-and-one-half years or from its inception if less
than five-and-one-half 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
------------------------------------------ ---------------
SIX SIX
MONTHS YEAR ENDED SEPTEMBER 30, MONTHS 5/27/99*
ENDED ------------------------------------------ ENDED TO
3/31/00 1999 1998 1997 1996 1995 3/31/00 9/30/99
------- ----- ----- ----- ----- ----- ------ ------
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.. $7.13 $7.78 $7.56 $7.60 $7.59 $7.40 $7.22 $7.58
----- ----- ----- ----- ----- ----- ----- -----
Income from Investment Operations:
Net investment income ................ 0.17 0.33 0.35 0.36 0.39 0.39 0.14 0.09
Net realized and unrealized investment
gain (loss) on investments.......... (0.09) (0.55) 0.30 0.21 0.01 0.29 (0.10) (0.36)
----- ----- ----- ----- ----- ----- ----- -----
Total from Investment Operations...... 0.08 (0.22) 0.65 0.57 0.40 0.68 0.04 (0.27)
----- ----- ----- ----- ----- ----- ----- -----
Less Distributions:
Dividends from net investment income.. (0.17) (0.33) (0.35) (0.36) (0.39) (0.39) (0.14) (0.09)
Distributions from net realized
capital gain ....................... (0.03) (0.10) (0.08) (0.25) -- (0.10) (0.03) --
----- ----- ----- ----- ----- ----- ----- -----
Total Distributions .................. (0.20) (0.43) (0.43) (0.61) (0.39) (0.49) (0.17) (0.09)
----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period........ $7.01 $7.13 $7.78 $7.56 $7.60 $7.59 $7.09 $7.22
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN: 1.12% (3.05)% 8.87% 7.96% 5.37% 9.77% 0.61% (3.33)%
RATIOS/SUPPLEMENTAL DATA:
Assets, end of period (000s omitted) $49,578 $52,992 $61,739 $62,597 $66,293 $73,561 $250 $127
Ratio of expenses to average net assets 1.10%+ 1.07% 1.02% 1.06% 1.02% 1.01% 1.86%+ 1.82%+
Ratio of net income to average net assets 4.78%+ 4.35% 4.54% 4.90% 5.06% 5.29% 4.02%+ 3.71%+
Portfolio turnover rate............... 8.87% 5.55% 23.37% 20.22% 25.65% 4.66% 8.87% 5.55%+
------------------
See footnotes on page 14.
</TABLE>
13
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS D
-----------------------------------------------------
SIX
MONTHS YEAR ENDED SEPTEMBER 30,
ENDED -------------------------------------------
3/31/00 1999 1998 1997 1996 1995
------ ----- ----- ----- ----- -----
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ...... $7.22 $7.86 $7.64 $7.68 $7.67 $7.48
----- ----- ----- ----- ----- -----
Income from Investment Operations:
Net investment income ..................... 0.14 0.27 0.29 0.31 0.33 0.33
Net realized and unrealized gain (loss)
on investments .......................... (0.10) (0.54) 0.30 0.21 0.01 0.29
----- ----- ----- ----- ----- -----
Total from Investment Operations .......... 0.04 (0.27) 0.59 0.52 0.34 0.62
----- ----- ----- ----- ----- -----
Less Distributions:
Dividends from net investment income....... (0.14) (0.27) (0.29) (0.31) (0.33) (0.33)
Distributions from net gain realized ...... (0.03) (0.10) (0.08) (0.25) -- (0.10)
----- ----- ----- ----- ----- -----
Total Distributions ....................... (0.17) (0.37) (0.37) (0.56) (0.33) (0.43)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period............. $7.09 $7.22 $7.86 $7.64 $7.68 $7.67
===== ===== ===== ===== ===== =====
TOTAL RETURN:.............................. 0.61% (3.57)% 7.97% 7.10% 4.56% 8.79%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) .. $926 $1,550 $1,582 $1,282 $1,152 $1,190
Ratio of expenses to average net assets.... 1.86%+ 1.82% 1.80% 1.83% 1.79% 1.89%
Ratio of net income to average net assets.. 4.02%+ 3.60% 3.76% 4.13% 4.29% 4.45%
Portfolio turnover rate.................... 8.87% 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>
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
March 31, 2000, and the related statement of operations for the six months then
ended, the statements of changes in net assets for the six months then ended and
for the year ended September 30, 1999, 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of March 31, 2000, 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 reasonable
basis for our opinion.
In our opinion, the 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 March 31, 2000, the results of
its operations for the six months then ended, the changes in its net assets, and
the financial highlights for the respective stated periods, in conformity with
accounting principles generally accepted in the United States of America.
/s/Deloitte & Touche LLP
----------------------
DELOITTE & TOUCHE LLP
New York, New York
May 5, 2000
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
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
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
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
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 -- 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.
18
<PAGE>
SELIGMAN
NEW JERSEY
MUNICIPAL FUND, INC.
Mid-Year Report
March 31,2000
Providing Income
Exempt From Regular
Income Tax
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.
TECNJ3 3/00
