CMA NEW YORK MUN MONEY FUND OF CMA MULTI STATE MUN SERS TRUS, DEFS14A, 1994-01-07

CMA NEW YORK MUN MONEY FUND OF CMA MULTI STATE MUN SERS TRUS
DEFS14A, 1994-01-07

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<PAGE>

CMA MULTI-STATE MUNICIPAL SERIES TRUST

BOX 9011
PRINCETON, NEW JERSEY 08543-9011

NOTICE OF MEETING OF SHAREHOLDERS

FEBRUARY 25, 1994

To The Shareholders of:

CMA Arizona Municipal Money Fund CMA New Jersey Municipal Money Fund
CMA California Municipal Money Fund CMA New York Municipal Money Fund
CMA Connecticut Municipal Money Fund CMA North Carolina Municipal Money Fund
CMA Massachusetts Municipal Money Fund CMA Ohio Municipal Money Fund
CMA Michigan Municipal Money Fund CMA Pennsylvania Municipal Money Fund

Notice is hereby given that a Meeting of Shareholders (the "Meeting") of CMA
Arizona Municipal Money Fund, CMA California Municipal Money Fund, CMA
Connecticut Municipal Money Fund, CMA Massachusetts Municipal Money Fund, CMA
Michigan Municipal Money Fund, CMA New Jersey Municipal Money Fund, CMA New
York Municipal Money Fund, CMA North Carolina Municipal Money Fund, CMA Ohio
Municipal Money Fund and CMA Pennsylvania Municipal Money Fund (together, the
"Funds"), each a separate series ("Series") of CMA Multi-State Municipal Series
Trust (the "Trust"), will be held at the offices of Merrill Lynch Asset
Management, 800 Scudders Mill Road, Plainsboro, New Jersey, on Friday, February
25, 1994 at 9:30 A.M. for the following purposes:

(1) To elect six Trustees to serve for an indefinite term;

(2) To consider and act upon a proposal to ratify the selection of
Deloitte & Touche to serve as independent auditors of each Fund for
its fiscal year ending March 31, 1994; and

(3) To transact such other business as may properly come before the
Meeting or any adjournment thereof.

The Board of Trustees has fixed the close of business on December 20, 1993 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Meeting or any adjournment thereof.

A complete list of the shareholders of the Funds entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Funds for any purpose germane to the Meeting during ordinary business hours
from and after February 11, 1994 at the office of the Trust, 800 Scudders Mill
Road, Plainsboro, New Jersey 08536. You are cordially invited to attend the
Meeting. Shareholders who do not expect to attend the Meeting in person are
requested to complete, date and sign the enclosed form of proxy and return it
promptly in the envelope provided for that purpose. The enclosed proxy is being
solicited on behalf of the Board of Trustees of the Fund.

By Order of the Board of
Trustees

Robert Harris
Secretary

Plainsboro, New Jersey
Dated: January 7, 1994
<PAGE>

PROXY STATEMENT

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

CMA MULTI-STATE MUNICIPAL SERIES TRUST
BOX 9011
PRINCETON, NEW JERSEY 08543-9011

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

MEETING OF SHAREHOLDERS

FEBRUARY 25, 1994

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Trustees of CMA Arizona Municipal Money Fund
(the "Arizona Fund"), CMA California Municipal Money Fund (the "California
Fund"), CMA Connecticut Municipal Money Fund (the "Connecticut Fund"), CMA
Massachusetts Municipal Money Fund (the "Massachusetts Fund"), CMA Michigan
Municipal Money Fund (the "Michigan Fund"), CMA New Jersey Municipal Money Fund
(the "New Jersey Fund"), CMA New York Municipal Money Fund (the "New York
Fund"), CMA North Carolina Municipal Money Fund (the "North Carolina Fund"),
CMA Ohio Municipal Money Fund (the "Ohio Fund") and CMA Pennsylvania Municipal
Money Fund (the "Pennsylvania Fund") (together, the "Funds"), each a separate
series ("Series") of CMA Multi-State Municipal Series Trust, a Massachusetts
business trust (the "Trust"), to be voted at a Meeting of Shareholders of the
Funds (the "Meeting"), to be held at the offices of Merrill Lynch Asset
Management ("MLAM"), 800 Scudders Mill Road, Plainsboro, New Jersey, on Friday,
February 25, 1994 at 9:30 A.M. The approximate mailing date of this Proxy
Statement is January 12, 1994.

All properly executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon or otherwise as
provided therein. Unless instructions to the contrary are marked, proxies will
be voted for the election of six Trustees named herein to serve for an
indefinite term and for the ratification of the selection of independent
auditors to serve for the Funds' current fiscal year. Any proxy may be revoked
at any time prior to the exercise thereof by giving written notice to the
Secretary of the Trust.

The Trust comprises separate series, each of which is a separate portfolio
offering a separate class of shares to selected groups of purchasers. Each
Series is managed independently, in order to provide to shareholders who are
residents of the state to which such Series relates current income exempt from
federal, state and local income taxes, preservation of capital and liquidity
available from investing in a portfolio of short-term, high quality, tax-exempt
securities. Holders of shares of each of the Funds are receiving a proxy and
accompanying Notice and Proxy Statement with respect to the Meeting. See
"Additional Information" below as to the required vote of the shareholders of
the Funds in connection with Items 1 and 2 of the Notice of Meeting.

The Board of Trustees has fixed the close of business on December 20, 1993 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Meeting and at any adjournment thereof. Shareholders on the
record date will be entitled to one vote for each share held, with no shares
having
<PAGE>

cumulative voting rights. To the knowledge of management of the Trust, as of
December 20, 1993 no person was the beneficial owner of more than 5% of the
outstanding shares of any Fund.

Set forth below are the number of outstanding shares of beneficial interest,
par value $0.10 per share, of each of the Funds as of December 20, 1993.

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ARIZONA CALIFORNIA CONNECTICUT MASSACHUSETTS MICHIGAN NEW JERSEY NEW YORK NORTH CAROLINA OHIO PENNSYLVANIA
FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND
- ---------- ------------- ----------- ------------- ----------- ----------- ----------- -------------- ----------- ------------
55,884,405 1,165,214,329 243,576,558 163,731,092 219,812,281 404,883,658 710,635,842 255,355,058 209,246,523 324,871,258
</TABLE>

The Board of Trustees of the Trust knows of no business other than that
mentioned in Items 1 and 2 of the Notice of Meeting which will be presented for
consideration at the Meeting. If any other matter is properly presented, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgment.
ELECTION OF TRUSTEES

At the Meeting, six Trustees will be elected to serve for an indefinite term
until their successors are elected and qualified.

There normally will be no meeting of shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a special meeting of shareholders for the election of
Trustees. Shareholders may, in accordance with the terms of the Declaration of
Trust of the Trust, cause a meeting of shareholders to be held for the purpose
of voting on the removal of Trustees at the request of 10% of the outstanding
shares of the Trust. A Trustee may be removed at a special meeting of
shareholders by a vote of two-thirds of the outstanding shares. See "Additional
Information--Meetings of Shareholders" below.

It is the intention of the persons named in the enclosed proxy to nominate
and vote in favor of the election of the persons listed below.

Each nominee listed below has consented to serve as a Trustee. The Trustees
of the Trust know of no reason why any of these nominees will be unable to
serve, but in the event of any such unavailability, the proxies received will
be voted for such substitute nominee or nominees as the Trustees may recommend.

Certain information concerning the nominees is set forth below:

2
<PAGE>

<TABLE>
<CAPTION>
SHARES OF
THE FUNDS
PRINCIPAL OCCUPATIONS BENEFICIALLY
DURING PAST FIVE YEARS TRUSTEE OWNED AT
NAME AND ADDRESS OF NOMINEE AGE AND PUBLIC DIRECTORSHIPS(1) SINCE DECEMBER 23, 1993
--------------------------- --- --------------------------- ------- ------------------
<C> <C> <S> <C> <C>
Cynthia A. Montgomery(1).... 41 Professor, Harvard Business -- -0-
Harvard Business School School since 1989; Associate
Soldiers Field Road Professor,
Boston, Massachusetts 02163 J.L. Kellogg Graduate School of
Management, Northwestern Univer-
sity, 1985-1989; Assistant Pro-
fessor, Graduate School of Busi-
ness Administration, the Univer-
sity of Michigan, 1979-1985; Di-
rector, UNUM
Corporation.
Charles C. Reilly(1)(2)..... 62 President and Chief Investment 1990 -0-
9 Hampton Harbor Road Officer of Verus Capital, Inc.
Hampton Bays, New York from 1979 to 1990; Senior Vice
11946 President of Arnhold and S.
Bleichroeder, Inc. from 1973 to
1990; Adjunct Professor, Colum-
bia University Graduate School
of Business since 1990; Adjunct
Professor, Wharton School, Uni-
versity of Pennsylvania, 1990;
Director, Harvard Business
School Alumni Association, since
1991.
Kevin A. Ryan(1)(2)......... 61 Professor of Education at Boston 1992 13,010
127 Commonwealth Avenue University since 1982; Founder
Chestnut Hill, and current Director of The Bos-
Massachusetts 02167 ton University Center for the
Advancement of Ethics and Char-
acter.
Richard R. West(1)(2)....... 55 Professor of Finance, and Dean 1991 -0-
482 Tepi Drive from 1984 to 1993, New York Uni-
Southbury, Connecticut versity Leonard N. Stern School
06488 of Business Administration; Pro-
fessor of Finance at the Amos
Tuck School of Business Adminis-
tration from 1976 to 1984 and
Dean from 1976 to 1983; Director
of Vornado, Inc. (real estate
holding corporation), Bowne &
Co., Inc. (printer), Smith Co-
rona Corporation (manufacturer
of typewriters and word proces-
sors) and Alexander's Inc.
</TABLE>

3
<PAGE>

(1) Each of the nominees is a director or trustee of certain other investment
companies for which MLAM or FAM acts as investment adviser. See "Merrill
Lynch Investment Company Directorships" below.

(2) Member of Audit Committee of the Board of Trustees.

(3) Interested person, as defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"), of the Trust.

Committee and Trustees' Meetings. The Board of Trustees has a standing Audit
Committee which consists of the Trustees who are not "interested persons" of
the Trust within the meaning of the Investment Company Act. The principal
purpose of the Audit Committee is to review the scope of the annual audit
conducted by the Funds' independent auditors and the evaluation by such
auditors of the accounting procedures followed by the Funds. The non-interested
Trustees have retained independent legal counsel to assist them in connection
with these duties. The Board of Trustees does not have a nominating committee.

During the fiscal year ended March 31, 1993, the Board of Trustees held five
meetings and the Audit Committee held four meetings. Each of the Trustees then
serving attended at least 75% of the total number of meetings of the Board of
Trustees and, if a member, the total number of meetings of the Audit Committee,
held during such period.

Interested Persons. The Fund considers Mr. Zeikel to be an "interested
person" of the Trust within the meaning of Section 2(a)(19) of the Investment
Company Act as a result of the position he holds with FAM and its affiliates.
Mr. Zeikel is the President of the Trust, the President of MLAM and FAM, and a
Director of Princeton Services, the general partner of FAM and MLAM.

Compensation of Trustees. FAM, the investment adviser, pays all compensation
of all officers of the Trust and all Trustees of the Trust who are affiliated
with ML & Co. or its subsidiaries. The Trust pays each

4
<PAGE>

Trustee not affiliated with the investment adviser a fee of $4,000 per year
plus $800 per meeting attended, together with such Trustee's actual out-of-
pocket expenses relating to attendance at meetings. The Trust also pays each
member of its Audit Committee, which consists of all of the non-affiliated
Trustees, a fee of $2,000 per year, together with such Trustee's out-of-pocket
expenses relating to attendance at meetings. In addition, the Chairman of the
Audit Committee receives an annual fee of $1,000. These fees and expenses
aggregated $38,344 for the fiscal year ended March 31, 1993.

Merrill Lynch Investment Company Directorships. FAM and MLAM act as the
investment adviser for over 90 other registered investment companies. Mr.
Zeikel is a trustee or director of each of these companies except for Merrill
Lynch Series Fund, Inc., Merrill Lynch Institutional Intermediate Fund, Merrill
Lynch Funds for Institutions Series and Merrill Lynch Institutional Tax-Exempt
Fund. Each of the nominees is a director or trustee of Merrill Lynch Utility
Income Fund, MuniVest Fund, Inc., MuniVest Fund II, Inc., Senior High Income
Portfolio, Inc., Senior High Income Portfolio II, Inc., Taurus MuniCalifornia
Holdings, Inc. and Taurus MuniNewYork Holdings, Inc. Messrs. Forbes, Reilly,
Ryan and West are trustees or directors of and Ms. Montgomery is nominated to
be a trustee or director of CBA Money Fund, CMA Money Fund, CMA Treasury Fund,
CMA Tax-Exempt Fund, CMA Government Securities Fund, Merrill Lynch Strategic
Dividend Fund, Merrill Lynch Municipal Series Trust, Merrill Lynch Corporate
Bond Fund, Inc., Merrill Lynch Municipal Bond Fund, Inc., The Corporate Fund
Accumulation Program, Inc., The Municipal Fund Accumulation Program, Inc.,
Merrill Lynch Prime Fund, Inc., Merrill Lynch Global Utility Fund, Inc.,
Merrill Lynch High Income Municipal Bond Fund, Inc., and Merrill Lynch Fund For
Tomorrow, Inc. In addition, Messrs. Reilly and West are directors of Merrill
Lynch Healthcare Fund, Inc., Merrill Lynch International Holdings, Inc.,
Merrill Lynch Latin America Fund, Inc., Merrill Lynch Short-Term Global Income
Fund, Inc., Merrill Lynch Technology Fund, Inc., Merrill Lynch Global Bond Fund
for Investment and Retirement, Merrill Lynch Global Allocation Fund, Inc.,
Merrill Lynch Pacific Fund, Inc., Merrill Lynch Developing Capital Markets
Fund, Inc., Merrill Lynch EuroFund, Merrill Lynch Dragon Fund, Inc., Merrill
Lynch International Equity Fund, and Merrill Lynch Americas Income Fund, Inc.

Officers of the Trust. The Board of Trustees has elected 11 officers of the
Trust. The following sets forth information concerning each of these officers:

<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
----------------------------- ------ --- -------
<S> <C> <C> <C>
Arthur Zeikel....................................... President 61 1988
President of MLAM since 1977, Chief Investment
Officer thereof since 1976 and Director thereof
from 1976 to 1993; President and Chief Investment
Officer of FAM since 1977 and Director thereof
from 1977 to 1993; Director of Princeton Services
since 1993; Executive Vice President of ML & Co.
since 1990; Executive Vice President of Merrill
Lynch since 1990 and a Senior Vice President from
1985 to 1990.
Terry K. Glenn...................................... Executive Vice 53 1988
Executive Vice President of MLAM and FAM since 1983 President
and Director thereof from 1992 to 1993; Director
of Princeton Services since 1993; President of
Merrill Lynch Funds Distributor, Inc. ("MLFD")
since 1986 and Director thereof since 1991;
President of Princeton Administrators.
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
----------------------------- ------ --- -------
<S> <C> <C> <C>
Vincent R. Giordano.......................... Senior Vice President 49 1988
Senior Vice President of FAM and MLAM since
1984 and Vice President from 1980 to 1984.
Edward J. Andrews............................ Vice President 33 1992
Vice President of MLAM since 1991;
investment officer in the Private Banking
Division of Citibank, N.A. from 1982 to
1991.
Donald C. Burke.............................. Vice President 33 1993
Vice President of MLAM since 1990; employee
of Deloitte & Touche from 1982 to 1990.
Peter J. Hayes............................... Vice President 34 1990
Vice President of MLAM since 1989, Assistant
Vice President of MLAM from 1987 to 1989;
Assistant Vice President of Shawmut Bank,
N.A. from 1985 to 1987.
Kenneth A. Jacob............................. Vice President 42 1988
Vice President of MLAM since 1984.
Kevin A. Schiatta............................ Vice President 39 1992
Vice President of MLAM since 1985.
Helen Marie Sheehan.......................... Vice President 33 1990
Vice President of MLAM since 1991, Assistant
Vice President of MLAM from 1989 to 1991
and employee of MLAM since 1985.
Gerald M. Richard............................ Treasurer 44 1988
Senior Vice President and Treasurer of MLAM
and FAM since 1984; Treasurer of MLFD since
1984 and Vice President since 1981.
Robert Harris................................ Secretary 41 1988
Vice President of MLAM since 1984; Secretary
of MLFD since 1982.
</TABLE>

Share Ownership. On December 23, 1993, the Trustees and officers of the Trust
as a group (16 persons) owned an aggregate of less than 1/4 of 1% of the
outstanding shares of beneficial interest of any of the Funds. On such date,
Mr. Zeikel, a Trustee of the Trust, and the officers of the Trust owned an
aggregate of less than 1/4 of 1% of the outstanding shares of common stock of
ML & Co.

SELECTION OF INDEPENDENT AUDITORS

The Trustees of the Trust, including a majority of the Trustees who are not
interested persons of the Trust, have selected the firm of Deloitte & Touche
("D&T"), independent auditors, to examine the financial statements of each of
the Funds for the current fiscal year. The Trustees of the Trust know of no
direct or indirect financial interest of such firm in any of the Funds. Such
appointment is subject to ratification or rejection by the shareholders of the
Trust. Unless a contrary specification is made, the accompanying proxy will be
voted in favor of ratifying the selection of such auditors.

6
<PAGE>

D&T also acts as independent auditors for ML & Co. and all of its
subsidiaries and for substantially all of the other investment companies for
which MLAM or FAM acts as investment adviser. The fees received by D&T from
these other entities are substantially greater, in the aggregate, than the
total fees received by it from the Funds. The Trustees of the Trust considered
the fact that D&T has been retained as the independent auditors for ML & Co.
and the other entities described above in its evaluation of the independence of
D&T with respect to the Funds.

Representatives of D&T are expected to be present at the Meeting and will
have the opportunity to make a statement if they so desire and to respond to
questions from shareholders.

THE MANAGEMENT AGREEMENT

Each of the Funds has entered into a management agreement (the "Management
Agreement") with FAM. On June 2, 1993, the Trustees of the Trust approved the
continuance of each of the Management Agreements for additional periods of one
year each.

INFORMATION CONCERNING FAM

Effective January 1, 1994, FAM was reorganized as a Delaware limited
partnership. FAM (the general partner of which is Princeton Services, a wholly-
owned subsidiary of ML & Co.) is owned and controlled by ML & Co. and is
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536. ML & Co. is
located at 250 Vesey Street, New York, New York 10281. The reorganization did
not result in a change of management of FAM, in any of its personnel, or in an
adverse change in its financial condition. Prior to the reorganization, FAM
(which was known as Fund Asset Management, Inc.) was a Delaware corporation
which was incorporated in 1976. FAM was a wholly-owned subsidiary of MLAM (a
Delaware corporation, which was also reorganized as a Delaware limited
partnership effective January 1, 1994) prior to its reorganization. MLAM was a
wholly-owned subsidiary of ML & Co. prior to its reorganization and continues
to be owned and controlled by ML & Co. after its reorganization. MLAM is also
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536. MLAM or FAM
acts as the investment adviser for more than 90 other registered investment
companies. In addition, MLAM offers portfolio management and portfolio analysis
services to individuals and institutions. FAM's audited balance sheet for its
fiscal year ended December 28, 1992 is appended to this Proxy Statement as
Exhibit A. An unaudited balance sheet for FAM as of September 24, 1993 is
appended to this Proxy Statement as Exhibit B. FAM represents that, to its
knowledge, there has been no material adverse change in its financial condition
since September 24, 1993.

Securities held by the Funds may also be held by, or be appropriate
investments for, other funds or clients (collectively referred to as "clients")
for which MLAM or FAM acts as an investment adviser. Because of different
investment objectives or other factors, a particular security may be bought for
one or more clients when one or more clients are selling the security. If
purchases or sales of securities for the Funds or other clients arise for
consideration at or about the same time, transactions in such securities will
be made, insofar as feasible, for the respective clients in a manner deemed
equitable to all by MLAM or FAM. To the extent that transactions on behalf of
more than one client of MLAM or FAM during the same period may increase the
demand for securities being purchased or the supply of securities being sold,
there may be an adverse effect on price.

7
<PAGE>

The following table sets forth the name, title and principal occupation of
the principal executive officer of FAM and the directors of Princeton
Services, the general partner of FAM:

<TABLE>
<CAPTION>
NAME TITLE PRINCIPAL OCCUPATION
---- ----- --------------------
<S> <C> <C>
Arthur Zeikel*............ President of FAM and President of MLAM and FAM
Director of Princeton
Services
Terry K. Glenn............ Executive Vice President Executive Vice President
of FAM and Director of of MLAM and FAM
Princeton Services
Philip L. Kirstein........ Senior Vice President and Senior Vice President and
General Counsel of FAM General Counsel of MLAM
and Director of Princeton and FAM
Services
</TABLE>
- --------
* Mr Zeikel is presently a Trustee and the President of the Trust. The address
of Messrs. Zeikel, Glenn and Kirstein is P.O. Box 9011, Princeton, New
Jersey 08543-9011, which is also the address of FAM and MLAM.

TERMS OF MANAGEMENT AGREEMENTS

Management Agreements. The Management Agreements provide that, subject to
the direction of the Trustees of the Trust, FAM is responsible for the actual
management of each Fund's portfolio and for the review of each Fund's holdings
in light of its own research analysis and analyses from other relevant
sources. The responsibility for making decisions to buy, sell or hold a
particular security rests with FAM, subject to review by the Trustees. FAM is
also obligated to perform certain administrative services and to provide all
the office space, facilities, equipment and necessary personnel for portfolio
management of the Fund.

Management Fees. The Management Agreements provide that as compensation for
its services to the Funds, FAM receives from each Fund at the end of each
month a fee at an annual rate of 0.50% of the first $500 million of average
daily net assets of each Fund, 0.425% of average daily net assets in excess of
$500 million but not exceeding $1 billion, and 0.375% of average daily net
assets in excess of $1 billion.

In the interest of minimizing expenses of the Funds, FAM may voluntarily
agree to assume a portion of the expenses of a Fund. FAM may discontinue or
reduce such assumption of expenses at any time without notice.

Set forth below are the total management fees paid by each Fund to FAM and
total management fees waived by FAM for the fiscal year ended March 31, 1993.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31, 1993
-------------------------------------
TOTAL FEE VOLUNTARILY
MANAGEMENT FEE WAIVED BY MANAGER
----------------- -------------------
<S> <C> <C>
Arizona Fund*....................... $ 25,112 $ 25,112
California Fund..................... $4,681,982 --
Connecticut Fund.................... $1,017,077 $203,282
Massachusetts Fund.................. $ 602,465 --
Michigan Fund....................... $ 940,902 $163,597
New Jersey Fund..................... $1,771,517 --
New York Fund....................... $3,028,869 --
North Carolina Fund................. $1,112,762 $360,075
Ohio Fund........................... $ 962,179 $ 12,153
Pennsylvania Fund................... $1,338,465 --
</TABLE>
- --------
* Commenced operations February 8, 1993.

8
<PAGE>

Payment of Expenses. The Management Agreements, as described above, obligate
FAM to provide investment advisory services, to furnish administrative
services, office space and facilities for management of the affairs of the
Trust and each Fund and to pay all compensation of and furnish office space for
officers and employees of the Trust, as well as the fees of all Trustees of the
Trust who are affiliated persons of ML & Co. or any of its subsidiaries. Except
for certain expenses incurred by Merrill Lynch, each Fund pays all other
expenses incurred in its operations and a portion of the Trust's general
administrative expenses allocated on the basis of the asset size of the
respective Fund. Expenses that will be borne directly by the Funds include
redemption expenses, expenses of portfolio transactions, expenses of
registering the shares under Federal and state securities laws, pricing costs
(including the daily calculation of net asset value), expenses of printing
shareholder reports, prospectuses and statements of additional information
(except to the extent paid for by Merrill Lynch), fees for legal and auditing
services, Securities and Exchange Commission fees, interest, certain taxes, and
other expenses attributable to a particular Series. Expenses which will be
allocated on the basis of asset size of the respective Funds include fees and
expenses of unaffiliated Trustees, state franchise taxes, costs of printing
proxies and other expenses relating to shareholder meetings and other expenses
properly payable by the Trust. The organizational expenses of the Trust were
paid by the Trust and have been allocated among the Funds in a manner deemed
equitable by the Trustees. Depending upon the nature of a lawsuit, litigation
costs may be assessed to the specific Fund to which the lawsuit relates or
allocated on the basis of the asset size of the respective Funds. The Trustees
have determined that this is an appropriate method of allocation of expenses.
Accounting services are provided to the Funds by FAM and the Funds reimburse
FAM for their costs in connection with such services.

Set forth below is the amount each Fund reimbursed FAM for such accounting
services for the fiscal year ended March 31, 1993.

<TABLE>
<CAPTION>
ARIZONA CALIFORNIA CONNECTICUT MASSACHUSETTS MICHIGAN NEW JERSEY NEW YORK NORTH CAROLINA OHIO PENNSYLVANIA
FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND
- ------- ---------- ----------- ------------- -------- ---------- -------- -------------- ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$5,560 $74,842 $19,871 $37,295 $19,697 $27,175 $60,747 $26,204 $23,700 $38,383
</TABLE>

Duration and Termination. The Management Agreements will continue in effect
from year to year if approved annually (a) by the Trustees of the Trust or by a
majority of the outstanding shares of voting securities of the Fund and (b) by
a majority of the Trustees who are not parties to such agreement or interested
persons (as defined in the Investment Company Act) of any such party. Such
agreements are not assignable and may be terminated without penalty on 60 days'
written notice at the option of either party thereto or by the vote of the
shareholders of the Fund. The Management Agreements will continue in effect for
an indefinite term but are not assignable and may be terminated without penalty
on 60 days' written notice at the option of either party thereto.

9
<PAGE>

PORTFOLIO TRANSACTIONS

The Funds have no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policy
established by the Trustees and officers of the Trust, FAM is primarily
responsible for each Fund's portfolio decisions and the placing of each Fund's
portfolio transactions. In placing orders, it is the policy of the Trust to
obtain the best net results taking into account such factors as the price of
the securities and the firm's risk in positioning the securities involved.
While FAM generally seeks reasonably competitive spreads or commissions, the
Funds will not necessarily be paying the lowest spread or commission available.
The Trust's policy of investing in securities with short maturities will result
in high portfolio turnover.

The securities in which the Funds invest are traded in the over-the-counter
market. Where possible, the Funds will deal directly with the dealers who make
a market in the securities involved except in those circumstances where better
prices and execution are available elsewhere. Such dealers usually are acting
as principal for their own accounts. On occasion, securities may be purchased
directly from the issuer. The municipal securities in which the Funds invest
generally are traded on a net basis and normally do not involve either
brokerage commissions or transfer taxes. The cost of executing portfolio
securities transactions of the Funds primarily will consist of dealer spreads
and underwriting commissions. Under the Investment Company Act, persons
affiliated with the Trust are prohibited from dealing with the Trust or any
Fund as a principal in the purchase and sale of securities unless an exemptive
order allowing such transactions is obtained from the Securities and Exchange
Commission. Since over-the-counter transactions are usually principal
transactions, affiliated persons of the Trust, including Merrill Lynch
Government Securities Inc. and Merrill Lynch, may not serve as the Funds'
dealer in connection with such transactions, except pursuant to the exemptive
order described below. Without the relief provided by the exemptive order
described below, the Funds could purchase municipal securities from
underwriting syndicates of which Merrill Lynch was a member under certain
conditions in accordance with the provisions of a rule adopted under the
Investment Company Act. In 1987, the Securities and Exchange Commission issued
an exemptive order to one of the CMA Funds which permits the Funds to engage in
certain principal transactions with Merrill Lynch in tax-exempt securities
subject to certain conditions. An affiliated person of the Trust may serve as
its broker in over-the-counter transactions conducted on an agency basis.

Set forth below are the number of principal transactions each Fund engaged in
with Merrill Lynch and the aggregate amount of those transactions during the
fiscal year ended March 31, 1993.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
MARCH 31, 1993
----------------------
NUMBER OF AGGREGATE
TRANSACTIONS AMOUNT*
------------ ---------
<S> <C> <C>
Arizona Fund(1).......................................... -- --
California Fund.......................................... 165 $948.6
Connecticut Fund......................................... 26 $ 62.9
Massachusetts Fund....................................... 13 $ 13.8
Michigan Fund............................................ 22 $ 88.3
New Jersey Fund.......................................... 18 $ 51.5
New York Fund............................................ 46 $152.0
North Carolina Fund...................................... 77 $117.4
Ohio Fund................................................ 9 $ 13.0
Pennsylvania Fund........................................ 8 $ 26.6
</TABLE>
- --------
(1) Commenced operations February 8, 1993.
* in millions

10
<PAGE>

The Trustees of the Trust have considered the possibility of recapturing for
the benefit of the Funds expenses of possible portfolio transactions, such as
dealers' spreads and underwriting commissions, by conducting such portfolio
transactions through affiliated entities, including Merrill Lynch. After
considering all factors deemed relevant, the Trustees made a determination not
to seek such recapture. The Trustees will reconsider this matter from time to
time. FAM has arranged for the Trust's custodian to receive any tender offer
solicitation fees on behalf of each Fund payable with respect to portfolio
securities of such Fund.

The Funds do not expect to use one particular dealer, but, subject to
obtaining the best execution, dealers who provide supplemental investment
research to FAM may receive orders for transactions by the Funds. Information
so received will be in addition to and not in lieu of the services required to
be performed by FAM under the Management Agreements and the expenses of FAM
will not necessarily be reduced as a result of the receipt of such supplemental
information.

ADDITIONAL INFORMATION

The expenses of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Funds.
The Funds will reimburse banks, brokers and others for their reasonable
expenses in forwarding proxy solicitation material to the beneficial owners of
the shares of the Funds. The Funds may also hire proxy solicitors at the
expense of the Funds.

In order to obtain the necessary quorum at the Meeting (i.e., one-third of
the shares of each Series entitled to vote at the Meeting, present in person or
by proxy), supplementary solicitation may be made by mail, telephone, telegraph
or personal interview by officers of the Trust. It is anticipated that the cost
of such supplementary solicitation, if any, will be nominal.

The proposal to elect the Trust's Trustees (Item 1) and the proposal to
ratify the selection of the Funds' independent auditors (Item 2) may be
approved by majority vote of the shareholders of each Series, present in person
or by proxy, at a meeting at which a quorum is duly constituted.

All shares represented by properly executed proxies, unless such proxies have
previously been revoked, will be voted at the Meeting in accordance with the
directions on the proxies; if no direction is indicated, the shares will be
voted "FOR" the six Trustee nominees and "FOR" the ratification of D&T as
independent auditors for the Funds. Shares will not be voted for any of the
aforementioned proposals, however, unless (i) in the judgment of the Trustees
of the Trust, there has been no material adverse change in the financial
condition of FAM between September 24, 1993 and the date of FAM's most recently
completed fiscal quarter and (ii) the Fund shall have received a certificate of
the President or a Senior Vice President of FAM, dated the Meeting date,
attesting that, to the knowledge of such officer, there has been no material
adverse change in the financial condition of FAM unless such material adverse
change has been disclosed to shareholders in additional proxy solicitation
materials.

Broker-dealer firms, including Merrill Lynch, holding shares of Funds in
"street name" for the benefit of their customers and clients will request the
instructions of such customers and clients on how to vote their shares on the
items before the Meeting. The Trust understands that, under the rules of the
New York Stock Exchange, such broker-dealer firms may, without instructions
from their customers and clients, grant authority to the proxies designated to
vote on the election of Trustees (Item 1) and ratification of the selection of
independent auditors (Item 2) if no instructions have been received prior to
the date specified in the broker-

11
<PAGE>

dealer firm's request for voting instructions. Merrill Lynch has advised that
it intends to exercise discretion over shares held in its name for which no
instructions are received by voting such shares in the same proportion as it
has voted shares for which it has received instructions. The Trust will include
shares held of record by broker-dealers as to which such authority has been
granted in its tabulation of the total number of votes present for purposes of
determining whether the necessary quorum of shareholders exists. The Trust also
will count towards a quorum shares as to which proxies are returned by record
shareholders but which are marked "abstain" on any Item. Accordingly, a failure
to instruct or an abstention will not have an effect on the vote on Item 1 or
Item 2.

The Declaration of Trust establishing the Trust, dated February 6, 1987, a
copy of which, together with all amendments thereto, is on file in the office
of the Secretary of the Commonwealth of Massachusetts, provides that the name
of the Trust refers to the Trustees under the Declaration of Trust collectively
as Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal
liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim of the Trust but the Trust Estate only
shall be liable.

MEETINGS OF SHAREHOLDERS

The Declaration of Trust does not require that the Trust hold an annual
meeting of shareholders. However, the Trust will be required to call special
meetings of shareholders in accordance with the requirements of the Investment
Company Act to seek approval of new management and advisory arrangements or of
a change in the fundamental policies, objectives or restrictions of the Funds.
The Trust also would be required to hold a special shareholders' meeting to
elect new Trustees at such time as less than a majority of the Trustees holding
office have been elected by shareholders. The Declaration of Trust provides
that a shareholders' meeting may be called for any reason at the request of 10%
of the outstanding shares of the Trust or by a majority of the Trustees.

By Order of the Board of
Trustees

Robert Harris
Secretary

Dated: January 7, 1994

12
<PAGE>

EXHIBIT A

INDEPENDENT AUDITORS' REPORT

Fund Asset Management, Inc.:

We have audited the accompanying balance sheet of Fund Asset Management, Inc.
(the "Company") as of December 25, 1992. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express an
opinion on the balance sheet based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, such balance sheet presents fairly, in all material respects,
the financial position of the Company at December 25, 1992 in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE
Parsippany, New Jersey
February 19, 1993

A-1
<PAGE>

FUND ASSET MANAGEMENT, INC.

BALANCE SHEET, DECEMBER 25, 1992

<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash............................................................. $ 21,356
Receivable from affiliated companies:
Lease transactions.............................................. 46,734,122
Fund management fees receivable.................................. 20,435,376
Investments in leases:
Leveraged leases................................................ 121,508,161
Sales-type lease................................................ 12,831,711
Investments in affiliated investment companies at the lower of
cost or market
(market: $33,307,413)........................................... 32,952,761
Investment in affiliated Limited Partnership..................... 32,293,647
Deferred charges................................................. 586,166
------------
Total Assets..................................................... $267,363,300
============

LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities:
Payable to Merrill Lynch Investment Management, Inc. and affili-
ates............................................................ $ 54,881,755
Deferred income taxes:
Arising from leveraged leases................................... 111,585,182
Arising from sales-type lease................................... 5,245,721
Other........................................................... 15,892,806
Other............................................................ 6,000
------------
Total liabilities................................................ 187,611,464
------------

Stockholder's Equity:
Common stock, par value $1.00 per share--authorized 25,000
shares;
outstanding 1,000 shares........................................ 1,000
Additional paid-in capital....................................... 684,594,627
Retained earnings................................................ 79,271,257
Proceeds receivable from ML & Co. from sale of subsidiary........ (684,115,048)
------------
Total stockholder's equity....................................... 79,751,836
------------
Total Liabilities and Stockholder's Equity....................... $267,363,300
============
</TABLE>

See notes to balance sheet.

A-2
<PAGE>

FUND ASSET MANAGEMENT, INC.

NOTES TO BALANCE SHEET

DECEMBER 25, 1992
1. Summary of Significant Accounting Policies

Organization--Fund Asset Management, Inc. (the "Company"), a wholly-owned
subsidiary of Merrill Lynch Investment Management, Inc. (the "Parent"), which
is an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), serves as an investment adviser to various registered open-end
investment companies. The Company is also a lessor participant in certain
leveraged and sales-type lease agreements.

Income Taxes--The results of the operations of the Company are included in
the consolidated Federal and combined state and local income tax returns filed
by ML & Co. It is the policy of ML & Co. to allocate the tax associated with
such operating results to each respective subsidiary in a manner which
approximates the separate company method. Effective in the first quarter of
1992, ML & Co. adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109") which requires an asset and
liability method in recording income taxes on all transactions that have been
recognized in the financial statements. SFAS 109 provides that deferred taxes
be adjusted to reflect tax rates at which future tax liabilities or assets are
expected to be settled or realized. Previously, the Company accounted for
income taxes in accordance with SFAS 96. The current year's impact on adopting
SFAS 109 was minimal.

2. Transactions with Affiliates

The Company serves as an investment adviser for certain affiliated investment
companies. The Company maintains investments in certain of these investment
companies. Such investments are carried at the lower of cost or market value.
Market value is determined based upon quoted market prices.

During 1992, the Company sold its investment in Merrill Lynch Interfunding,
Inc. an investor in select credit instruments, and Merlease Leasing Corp., a
lessor participant in lease agreements, to an affiliate at book value,
resulting in a receivable from ML & Co. This receivable is reflected as a
reduction to stockholder's equity.

The Company has an arrangement with Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S") which provides that the Company, which receives revenue
as investment adviser to certain investment companies (the "Funds"), reimburse
MLPF&S for certain costs incurred in processing transactions involving shares
of the Funds.

The "Receivable from affiliated companies" arising from lease transactions is
summarized as follows:

<TABLE>
<S> <C>
Monies advanced to fund lease transactions................ $(117,240,047)
Tax benefits allocated to the Company by ML & Co. ........ 150,407,083
Other..................................................... 13,567,086
-------------
Total................................................. $ 46,734,122
=============
</TABLE>

The Company has a 49 percent limited partnership interest in ML Plainsboro
Limited Partnership ("MLP"), whose general partner is an affiliate. Profits and
losses are allocated to the Company based on its percentage interest.

A-3
<PAGE>

FUND ASSET MANAGEMENT, INC.

NOTES TO BALANCE SHEET--CONTINUED

DECEMBER 25, 1992

ML & Co. is the holder of the Company's excess cash, which is available on
demand to meet current liabilities. ML & Co. credits the Company for interest,
at a floating rate approximating ML & Co.'s average borrowing rate, based on
the Company's average daily balances due to/from ML & Co.

3. Investments in Leases

The Company is a lessor participant in leveraged leases. The Company's net
investment in leveraged leases is summarized as follows:

<TABLE>
<S> <C>
Rentals receivable (net of principal and interest on non-
recourse debt)........................................... $117,309,811
Estimated residual values of leased assets................ 40,329,738
Less:
Unearned and deferred income............................ (34,891,388)
Allowance for uncollectibles............................ (1,240,000)
------------
Investment in leveraged leases............................ 121,508,161
Less deferred taxes arising from leveraged leases......... (111,585,182)
------------
Net investment in leveraged leases........................ $ 9,922,979
============
</TABLE>

Pertinent information relating to the Company's investments in leveraged
leases is summarized as follows:

<TABLE>
<CAPTION>
ESTIMATED
LENGTH OF RESIDUAL VALUE
LEASE EQUITY OF LEASED
TYPE OF PROPERTY (YEARS) INVESTMENT PROPERTY
---------------- --------- ---------- --------------
<S> <C> <C> <C>
Chemical tanker....................... 20 42.75% 15.0%
Generating plant...................... 24-25 34.06% 15.0%
</TABLE>

Financing beyond the Company's equity interest in the purchase price of the
properties was furnished by outside parties in the form of long-term debt that
provides for no recourse against the Company and is secured by a first lien on
the properties and related rentals. At the end of the respective lease terms,
ownership of the properties remains with the Company.

The Company's investment in the sales-type leases consisted of the following
elements at December 25, 1992:

<TABLE>
<S> <C>
Minimum lease payments receivable............................ $13,612,690
Less--unearned income........................................ (780,979)
-----------
Investment in sales-type financing leases.................... $12,831,711
===========
</TABLE>

At December 25, 1992 minimum lease payments receivable are $9,941,000 for
1993, $3,672,000 for 1994.

For Federal income tax purposes, the Company receives the investment tax
credit and has the benefit of tax deductions for (i) depreciation on the entire
amount of leased assets and (ii) interest on the outstanding long-term debt.
For state and local tax purposes, the Company also receives the benefits of tax
deductions

A-4
<PAGE>

FUND ASSET MANAGEMENT, INC.

NOTES TO BALANCE SHEET--CONTINUED

DECEMBER 25, 1992
from (i) and (ii) above. Since, during the early years of the leases, those
deductions exceed the Company's lease rental income, substantial excess
deductions are available to be applied against the Company's other income and
the consolidated income of ML & Co. In the later years of these leases, rental
income will exceed the related deductions and taxes will be payable (to the
extent that net deductions arising from additional leveraged lease transactions
do not offset such net lease income). Deferred taxes have been provided to
reflect these temporary differences.

4. Income Taxes

As part of the consolidated group, the Company transfers its current Federal
and state tax liabilities to MLIM. No such amounts were due to MLIM at December
25, 1992.

5. Pension Plan

The Company participates in the ML & Co. Comprehensive Retirement Program
(the "Program"), consisting of the Retirement Accumulation Plan ("RAP") and the
Employee Stock Ownership Plan (the "ESOP"). Under the Program, cash
contributions made by the Company and the ML & Co. stock held by the ESOP will
be allocated quarterly to participant's accounts. Allocations will be based on
years of service, age and eligible compensation. Actuarial data regarding the
Company's Plan participants is not separately available.

6. Postretirement Benefits Other Than Pensions

The Company provides certain health care and life insurance benefits for
retired employees. The Company reserves the right to amend or terminate this
program at any time. Substantially all of the Company's employees become
eligible for these benefits upon attainment of age 55 and completion of 10
years of service. The cost of these benefits is expensed as claims are paid.

In December 1990, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions ("SFAS 106"). SFAS 106, effective
for fiscal year 1993, will require that the Company change its method of
accounting for postretirement health care and life insurance benefits from
expensing these costs on a pay-as-you-go basis to an accrual basis. This change
in accounting will require the recognition of a transition obligation which
represents the actuarial present value of benefits attributed to prior employee
service. The Company has not yet determined what effect the adoption of SFAS
106 will have on its financial condition, results of operations or liquidity.

7. Name Change

Effective December 28, 1991, the Parent, through an amendment of its
certificate of incorporation, changed its name to Merrill Lynch Investment
Management, Inc. ("MLIM"). MLIM will do business under the name "Merrill Lynch
Asset Management".

A-5
<PAGE>

EXHIBIT B

FUND ASSET MANAGEMENT, INC.

BALANCE SHEET

SEPTEMBER 24, 1993 (UNAUDITED)

ASSETS

<TABLE>
<CAPTION>
<S> <C>
Cash............................................................ $ 561,297
Receivable from Affiliated Companies--Lease transactions........ 63,526,920
Investment in Affiliated Limited Partnership.................... 31,483,140
Investment in Leases:
Leveraged leases.............................................. 118,273,550
Sales-type lease.............................................. 8,152,491
Investment in Affiliated Investment Companies--at the lower of
cost or market
(market: $18,285,362).......................................... 16,702,798
Fund Management Fees Receivable................................. 22,057,239
-------------
TOTAL ASSETS.................................................... $ 260,757,435
=============
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES

Payable to Merrill Lynch Investment Management, Inc. and Affili-
ates........................................................... $ 19,667,011
Other Payables.................................................. 11,400
Deferred Income Taxes:
Arising from leveraged leases................................. 111,401,573
Arising from sales-type lease................................. 2,333,002
Other......................................................... 15,876,124
-------------
Total Liabilities............................................... 149,289,110
-------------
STOCKHOLDER'S EQUITY

Common Stock, par value $1.00 per share--authorized 25,000
shares; outstanding
1,000 shares................................................... 1,000
Additional Paid-in Capital...................................... 684,594,627
Retained Earnings............................................... 110,987,716
Proceeds Receivable from ML&Co. from Sale of Subsidiary......... (684,115,018)
-------------
Total Stockholder's Equity...................................... 111,468,325
-------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY...................... $ 260,757,435
=============
</TABLE>

B-1
<PAGE>

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

CMA ARIZONA MUNICIPAL MONEY FUND of PROXY
CMA MULTI-STATE MUNICIPAL SERIES TRUST
Box 9011, Princeton, New Jersey 08543-9011

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and Robert Harris
as proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of
beneficial interest of CMA Arizona Municipal Money Fund (the "Fund") held of
record by the undersigned on December 20, 1993 at a special meeting of
shareholders of the Fund to be held on February 25, 1994 or any adjournment
thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.

- --------------------------------------------------------------------------------
FOR WITHHOLD To withhold authority to vote for
1. Election of Trustees. [_] [_] any individual nominee, write the
name on the following line:

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

Nominees: Ronald W. Forbes, Cynthia A. Montgomery, Charles C. Reilly, Kevin
A. Ryan, Richard R. West, Arthur Zeikel

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

2. Proposal to ratify the selection of Deloitte & Touche as the independent
auditors of the Fund to serve for the current fiscal year.
FOR AGAINST ABSTAIN
[_] [_] [_]

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

3. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.

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

Please sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney or as
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.

- ----------------------------------------------------
Signature Date

- ----------------------------------------------------
Signature, if held jointly Date

Please mark boxes in blue or black ink.

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

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

BY SIGNING AND PROMPTLY RETURNING THE ENCLOSED PROXY YOU MAY SAVE
YOUR FUND THE EXPENSE OF ADDITIONAL SOLICITATION COSTS.

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

THE ENCLOSED PROXY CARD HAS BEEN FORWARDED TO YOU BECAUSE YOU
WERE A SHAREHOLDER ON THE RECORD DATE.

IT IS IMPORTANT THAT YOU VOTE AND SIGN THIS PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.

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

<PAGE>

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

CMA CALIFORNIA MUNICIPAL MONEY FUND of PROXY
CMA MULTI-STATE MUNICIPAL SERIES TRUST
Box 9011, Princeton, New Jersey 08543-9011

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and Robert Harris
as proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all shares of beneficial
interest of CMA California Municipal Money Fund (the "Fund") held of record by
the undersigned on December 20, 1993 at a special meeting of shareholders of
the Fund to be held on February 25, 1994 or any adjournment thereof.