[COVER PAGE]
OPPENHEIMER NEW JERSEY TAX-EXEMPT FUND
Annual Report July 31, 1996
[LOGO]OPPENHEIMERFUNDS/R/
<PAGE>
INSIDE FRONT COVER
YIELD
STANDARDIZED YIELDS
For the 30 Days Ended 7/31/96:(3)
Class A
3.95%
Class B
3.41%
Class C
3.28%
BEAT THE AVERAGE
Total Return for the 1-Year Period Ended 7/31/96:
Oppenheimer New Jersey Tax-Exempt
Fund (at net asset value)
6.41%
Lipper New Jersey Municipal
Debt Fund Average(4)
5.84%
This Fund is for NEW JERSEY residents who need a source of income that's EXEMPT
from current TAXES.
HOW YOUR FUND IS MANAGED
Oppenheimer New Jersey Tax-Exempt Fund invests in a diversified
portfolio of New Jersey municipal bonds. As a Fund shareholder, you receive
income that is free from federal and New Jersey income taxes.(1) Your dividends
don't increase your taxable income the way taxable investments do, so you can
keep more of what you earn.
New Jersey Tax-Exempt Fund is managed by an experienced team of
municipal bond specialists who research investments thoroughly before they are
included in the Fund's portfolio.
PERFORMANCE
Your Fund's average annual total returns at maximum offering price for Class A
shares for the 1-year period ended 7/31/96 and since inception of the Class on
3/1/94 were 1.36% and 2.36%, respectively. For Class B shares, average annual
total returns for the 1-year period and since inception of the Class on 3/1/94
were 0.61% and 2.44%, respectively. For Class C shares, cumulative average
annual total return since inception on 8/29/95 was 4.41%.(2)
OUTLOOK
"We think the outlook is positive. From our perspective, the economic growth
rate that set off increases in interest rates will not be enough to make
inflation a serious concern. Thus, we expect any further increase in interest
rates in the near future will be moderate and that the general bond market
could strengthen later in the year."
Caryn Halbrecht, Portfolio Manager
July 31, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. Past performance does not guarantee future results.
Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. For more complete information, please review the
prospectus carefully before you invest.
1. A portion of the distributions paid by the Fund may be subject to federal and
state income taxes. For investors subject to federal and/or state alternative
minimum tax (AMT), the Fund's distributions may increase this tax. Capital gains
distributions, if any, are taxed as capital gains.
2. Class A returns show results of hypothetical investments on 7/31/95 and
3/1/94 (inception of class), after deducting the current maximum initial sales
charge of 4.75%. Class B returns show results of hypothetical investments on
7/31/95 and 3/1/94 (inception of class), after the deduction of the applicable
contingent deferred sales charge of 5% (1-year) and 3% (since inception). Class
C shares show results of a hypothetical investment on 8/29/95 after the
deduction of the 1% contingent deferred sales charge. When such returns are
calculated in the same manner for the period ended 6/30/96, they are as follows:
for Class A shares, 0.88% and 2.05% for the 1-year period and since inception
of the class; for Class B shares, 0.12% and 2.19% for the 1-year period and
since inception of the class; and for Class C shares, cumulative total return
since inception of the class was 3.63%. An explanation of the different
performance calculations is in the Fund's prospectus.
3. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 7/31/96, divided by the maximum offering price
at the end of the period, compounded semiannually and then annualized. Falling
net asset values will tend to artificially raise yields.
4. Source: Lipper Analytical Services. The Lipper total return average for the
1-year period was for 52 New Jersey municipal debt funds. The average is shown
for comparative purposes only. Oppenheimer New Jersey Tax-Exempt Fund is
characterized by Lipper as a New Jersey municipal debt fund. Lipper performance
does not take sales charges into consideration.
2 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
BRIDGET A. MACASKILL
President
Oppenheimer
New Jersey
Tax-Exempt Fund
Dear Shareholder,
While municipal bonds have been affected by the concern over inflation
in recent months, we believe that the outlook remains favorable -- especially if
you're in a high tax bracket.
Let's review the first half of the year. The most widely quoted interest
rate on long-term bonds, the benchmark 30-year U.S. Treasury bond, rose from 6%
in January to 7% by mid-year. Municipal bond yields tend to track Treasuries
pretty closely, yielding slightly less -- about 80-85% of Treasuries -- because
their interest is free from federal income tax. But during those six months,
yields on muni bonds rose proportionately, increasing their after-tax advantage.
So, while the current rise in interest rates over the past six months
pushed bond prices lower, our outlook for the rest of the year is much more
positive. Although the prices of food and gas, the most common gauges of
inflation, have increased recently, we believe that inflation is likely to
remain under control. We feel that food production will be able to meet demand
and, unlike previous energy disruptions, there doesn't appear to be a shortage
of crude oil in the world today. Thus, we are confident that the general
long-term trend is for moderate growth and low inflation. And while we
anticipate that interest rates will fluctuate over the near term, we feel bond
market conditions should improve in the coming months.
A number of other developments bode well for the municipal bond market.
The first is the muni bond's continuing status as one of the few true remaining
tax shelters, as earlier proposals for flat tax legislation seem to have quieted
down considerably. Another factor favorably impacting the municipal bond market
is the strengthening financial condition of many municipalities throughout the
United States. This is particularly true of California, which is one of the
nation's largest issuers of municipal bonds.
Finally, the tax-free market is also benefiting from a shrinking supply
of securities. About ten years ago, a surge of municipal bond issuance occurred
just prior to the Tax Reform Act of 1986. By today's standards, these bonds paid
very high interest. This year, billions of dollars worth of these bonds are
being redeemed by issuers who were contractually obligated to wait at least ten
years to "call" them. As a result, the supply of securities is falling, and the
former bondholders are receiving cash which they will either reinvest in the
municipal bond market or place elsewhere.
All things considered--the prospect of lower interest rates, the
diminishing likelihood of major tax legislation, the strengthening economies of
states and localities, as well as the shrinking supply of securities--the
outlook is very positive for municipal bond investors.
Your portfolio managers discuss the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals in
the future.
/s/ Bridget A. Macaskill
Bridget A. Macaskill
August 21, 1996
3 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
CARYN HALBRECHT
Portfolio Manager
An interview with your Fund's managers.
Q+A
HOW HAS THE FUND PERFORMED OVER THE PAST YEAR?
Though the bond market overall was somewhat negative as a result of
investors' concerns that the economy was strengthening and interest rates would
rise over the near term, our performance year-to-date was stronger than some
funds in the same category. The strategic positioning decisions we made going
into this period ranked us 12th against a peer group of 52 ranked New Jersey
tax-free bond funds.(1)
WHAT INVESTMENT STRATEGIES MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
A major factor in the Fund's performance was our emphasis on pre-refunded
bonds, with shorter maturities, which performed extremely well versus other
municipal bonds. Pre-refunded bonds have low credit risk and are less sensitive
to changes in interest rates. With interest rates rising over much of the
period, these bonds performed extremely well compared to longer maturity
municipal bonds.
Our shorter-than-average duration, a measure of the portfolio's price
sensitivity, was particularly helpful in a rising rate environment. While a long
duration strategy can benefit bond investors when rates decline, the opposite is
typically true when rates rise.(2)
DID ANY INVESTMENT PERFORM POORLY?
As always, our philosophy is to spread the Fund's assets across a range of
fixed-income securities. Unfortunately, our holdings in long-term municipal
bonds underperformed other municipal bond sectors. But, we lowered our weighting
in this sector over the past six months which helped the Fund's performance.
Should rates turn around and begin to head lower again, these bonds have the
potential to appreciate significantly.
WHAT AREAS OF THE MARKET ARE YOU CURRENTLY TARGETING?
Because we also believe the market and interest rate environment will be
slightly better later in the year, we're buying securities with a higher degree
of exposure to the market. We're buying some longer-term bonds that tend to be
more volatile, but have the potential to outperform shorter-term bonds. At the
same time, by maintaining a fully diversified portfolio, we're taking
appropriate measures to offset the possibility that rates may continue to rise.
We've also been buying bonds issued by projects and localities that are
well-positioned to benefit from ongoing regional economic recovery. Besides the
New Jersey bonds we own, we purchased Puerto Rico higher education and highway
bonds for diversification.
WHAT IS YOUR OUTLOOK FOR THE FUND?
We think the outlook is positive. From our perspective, the economic growth
rate that set off increases in interest rates will not be enough to make
inflation a serious concern. Thus, we expect any increase in interest rates in
the near future will be moderate and that the general bond market could
strengthen later in the year. //
1. Source: Lipper Analytical Services 7/31/96. This comparison does not take
sales charges into consideration.
2. The Fund's portfolio is subject to change.
4 Oppenheimer New Jersey Tax-Exempt Fund
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<TABLE>
<CAPTION>
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STATEMENT OF INVESTMENTS JULY 31, 1996
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES - 98.1%
- ------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 82.4%
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bayonne, New Jersey General Obligation Bonds,
FGIC Insured, 6%, 5/1/13 Aaa/AAA/AAA $ 100,000 $ 103,496
-------------------------------------------------------------------------------------------------------------
Bergen County, New Jersey Utilities Authority
Water Pollution Control Revenue Bonds, Series A,
FGIC Insured, 6.50%, 12/15/12 Aaa/AAA/AAA 400,000 427,710
-------------------------------------------------------------------------------------------------------------
Camden County, New Jersey Utilities Authority
Sewer Revenue Bonds:
Prerefunded, FGIC Insured, 8.125%, 12/1/07 Aaa/AAA 505,000 542,047
Unrefunded Balance,
FGIC Insured, 8.125%, 12/1/07 Aaa/AAA 245,000 262,074
-------------------------------------------------------------------------------------------------------------
Delaware River Joint Toll Bridge Commission
Revenue Bonds, Interstate 78, Prerefunded,
FGIC Insured, 7.80%, 7/1/18 Aaa/AAA/AAA 175,000 189,912
-------------------------------------------------------------------------------------------------------------
Delaware River Port Authority, Delaware
River Bridges Revenue Refunding Bonds,
AMBAC Insured, 7.375%, 1/1/07 Aaa/AAA/AAA 750,000 809,147
-------------------------------------------------------------------------------------------------------------
Essex County, New Jersey Improvement Authority
Lease Revenue Bonds, Prerefunded,
AMBAC Insured, 7%, 12/1/20 Aaa/AAA/AAA 150,000 166,511
-------------------------------------------------------------------------------------------------------------
Hoboken, Union City & Weehawken, New Jersey Sewer
Authority Revenue Refunding Bonds, MBIA Insured,
6.20%, 8/1/19 Aaa/AAA 85,000 88,253
-------------------------------------------------------------------------------------------------------------
Hudson County, New Jersey Certificates of
Participation, Correctional Facility Improvements,
Prerefunded, BIG Insured, 7.60%, 12/1/21(1) Aaa/AAA 2,500,000 2,735,745
-------------------------------------------------------------------------------------------------------------
Hudson County, New Jersey Utilities Authority
System Revenue Bonds, Prerefunded,
11.875%, 7/1/06 Aaa/AAA 520,000 665,311
-------------------------------------------------------------------------------------------------------------
Lacey Municipal Utilities Authority of New Jersey
Water Revenue Bonds, Prerefunded,
BIG Insured, 7%, 12/1/16 Aaa/AAA 500,000 548,670
-------------------------------------------------------------------------------------------------------------
Mercer County, New Jersey Improvement Authority
Revenue Bonds, Justice Complex Project,
6.05%, 1/1/11 Aa/AA- 250,000 251,056
-------------------------------------------------------------------------------------------------------------
New Brunswick, New Jersey Parking Authority
Revenue Refunding Bonds, Series A,
FGIC Insured, 6.50%, 9/1/19 Aaa/AAA 150,000 159,674
-------------------------------------------------------------------------------------------------------------
New Jersey Economic Development Authority:
Pollution Control Revenue Bonds, Public Service
Electric & Gas Co. Project, Series A,
MBIA Insured, 6.40%, 5/1/32 Aaa/AAA 500,000 530,071
Water Facilities Revenue Bonds, American
Water Co., Inc. Project, Series A, FGIC
Insured, 6.875%, 11/1/34 Aaa/AAA/AAA 500,000 538,042
-------------------------------------------------------------------------------------------------------------
New Jersey Health Care Facilities
Financing Authority Revenue Bonds:
Centrastate Medical Center, Series A,
AMBAC Insured, 6%, 7/1/21 Aaa/AAA/AAA 100,000 101,804
Columbus Hospital, Series A, 7.50%, 7/1/21 Baa/BB- 1,000,000 1,045,872
Southern Ocean County Hospital,
Series A, 6.25%, 7/1/23 Baa/NR/BBB 1,000,000 990,932
St. Josephs Hospital & Medical Center,
Series A, 6%, 7/1/26 NR/AAA 750,000 751,853
-------------------------------------------------------------------------------------------------------------
New Jersey Sports & Exposition Authority Revenue
Bonds, Convention Center Luxury Tax, Series A,
MBIA Insured, 6.25%, 7/1/20 Aaa/AAA 80,000 83,284
</TABLE>
5 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
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STATEMENT OF INVESTMENTS (CONTINUED)
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New Jersey State General Obligation Bonds,
Series D, 8%, 2/15/07 Aa1/AA+/AA+ $ 400,000 $ 493,657
-------------------------------------------------------------------------------------------------------------
New Jersey State Housing & Mtg. Finance
Agency Revenue Bonds:
Home Buyer, Series J,
MBIA Insured, 6.20%, 10/1/25 Aaa/AAA 200,000 200,989
Refunding, Series 1, 6.70%, 11/1/28 NR/A+ 150,000 155,159
-------------------------------------------------------------------------------------------------------------
New Jersey State Turnpike Authority Revenue
Refunding Bonds, Series C, 6.50%, 1/1/16 Baa1/BBB+/A- 950,000 1,027,974
-------------------------------------------------------------------------------------------------------------
New Jersey Wastewater Treatment Trust
Revenue Refunding Bonds, Series A,
MBIA Insured, 7%, 9/1/07 Aaa/AAA 810,000 927,188
-------------------------------------------------------------------------------------------------------------
Ocean County, New Jersey General
Obligation Bonds:
7.40%, 10/15/00 Aa/AA-/AA 600,000 664,726
7.50%, 10/15/01 Aa/AA-/AA 500,000 564,671
-------------------------------------------------------------------------------------------------------------
Pennsauken Township, New Jersey Board of
Education Certificates of Participation,
BIG Insured, 7.70%, 7/15/09 Aaa/AAA 500,000 549,498
-------------------------------------------------------------------------------------------------------------
Port Authority of New York & New Jersey
Consolidated Revenue Bonds:
Ninety-Fourth Series, 6%, 12/1/14 A1/AA-/AA- 200,000 204,932
Sixty-Ninth Series, 7.125%, 6/1/25 A1/AA-/AA- 600,000 650,748
-------------------------------------------------------------------------------------------------------------
Port Authority of New York & New Jersey Special
Obligation Revenue Refunding Bonds,
KIAC-4 Project, 5th
Installment, 6.75%, 10/1/19 NR/NR 900,000 909,562
-------------------------------------------------------------------------------------------------------------
Sussex County, New Jersey General
Obligation Bonds, General Improvement,
AMBAC Insured, 6%, 4/1/07 Aaa/AAA/AAA 135,000 142,357
------------
17,482,925
- ------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS - 15.7%
-------------------------------------------------------------------------------------------------------------
Guam Power Authority Revenue Bonds,
Series A, 6.30%, 10/1/22 NR/BBB 185,000 185,216
-------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Aqueduct & Sewer
Authority Revenue Bonds,
Escrowed to Maturity, 10.25%, 7/1/09 Aaa/AAA 460,000 637,016
-------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue Bonds:
Series Y, 5%, 7/1/36 Baa1/A 1,000,000 855,659
Refunding, Series V, 6.625%, 7/1/12 Baa1/A 300,000 320,491
-------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority
Revenue Bonds, Unrefunded Balance,
Series O, 7.125%, 7/1/14 Baa1/A- 540,000 576,633
-------------------------------------------------------------------------------------------------------------
Puerto Rico Industrial, Tourist, Educational,
Medical & Environmental Control Facilities
Revenue Bonds, Polytechnic University Project,
Series A, 6.50%, 8/1/24 NR/BBB- 415,000 418,640
-------------------------------------------------------------------------------------------------------------
Virgin Islands Housing Finance Authority
Single Family Revenue Refunding Bonds,
Series A, 6.50%, 3/1/25 NR/AAA 350,000 352,246
--------------
3,345,901
--------------
Total Municipal Bonds and Notes (Cost $20,646,883) 20,828,826
6 Oppenheimer New Jersey Tax-Exempt Fund
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
SHORT-TERM TAX-EXEMPT OBLIGATIONS - 3.3%
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
New Jersey Economic Development Authority
Manufacturing Facilities Revenue Bonds, VPR Commerce
Center Project, 3.75%, 8/1/96(2) (Cost $700,000) $ 700,000 $ 700,000
------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $21,346,883) 101.4% 21,528,826
------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (1.4) (302,470)
------ ------------
NET ASSETS 100.0% $21,226,356
====== ============
</TABLE>
1. Securities with an aggregate market value of $2,735,745 are held in
collateralized accounts to cover initial margin requirements on open
futures sales contracts. See Note 5 of Notes to Financial Statements.
2. Floating or variable rate obligation maturing in more than one year. The
interest rate, which is based on specific, or an index of, market interest
rates, is subject to change periodically and is the effective rate on July
31, 1996. This instrument may also have a demand feature which allows the
recovery of principal at any time, or at specified intervals not exceeding
one year, on up to 30 days' notice. Maturity date shown represent
effective maturity based on a variable rate and, if applicable, demand
feature.
As of June 30, 1996, securities subject to the alternative minimum tax
amounted to $2,530,910 or 11.92% of the Fund's net assets.
Distribution of investments by industry, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
INDUSTRY MARKET VALUE PERCENT
-------- ------------ -------
<S> <C> <C>
Utilities:
Water $ 2,441,610 11.3%
Sewer 1,529,389 7.1
Electric 1,427,160 6.6
General Obligation Bonds 4,704,652 21.8
Transportation 4,218,537 19.6
Hospitals 2,890,460 13.4
Lease/Rental 1,327,129 6.2
Education 968,139 4.5
Housing 708,394 3.3
Letters of Credit 700,000 3.3
Pollution Control 530,072 2.5
Special Tax Bonds 83,284 0.4
--------------- ------
$ 21,528,826 100.0%
=============== ======
</TABLE>
See accompanying Notes to Financial Statements.
7 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
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STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS Investments, at value (cost $21,346,883) - see accompanying statement $21,528,826
--------------------------------------------------------------------------------------------------
Cash 144,126
--------------------------------------------------------------------------------------------------
Receivables:
Investments sold 2,941,224
Interest 263,263
Shares of beneficial interest sold 115,561
Daily variation on futures contracts - Note 5 7,188
--------------------------------------------------------------------------------------------------
Other 3,718
------------------
Total assets 25,003,906
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Payables and other liabilities:
Investments purchased 3,637,238
Dividends 60,520
Trustees' fees 38,835
Shareholder reports 11,389
Shares of beneficial interest redeemed 11,145
Distribution and service plan fees 2,542
Other 15,881
------------------
Total liabilities 3,777,550
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $21,226,356
------------------
------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $21,030,051
NET ASSETS --------------------------------------------------------------------------------------------------
Overdistributed net investment income (17,852)
--------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (7,162)
--------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments - Notes 3 and 5 221,319
------------------
Net assets $21,226,356
------------------
------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $11,354,321 and 1,023,211 shares of beneficial interest outstanding) $11.10
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $11.65
--------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $9,740,383 and 878,192 shares of beneficial interest outstanding) $11.09
--------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $131,652 and 11,866 shares of beneficial interest outstanding) $11.09
See accompanying Notes to Financial Statements.
</TABLE>
8 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
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STATEMENTS OF OPERATIONS
SEVEN
MONTHS ENDED YEAR ENDED
JULY 31, 1996(1) DECEMBER 31, 1995
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME Interest $671,686 $667,864
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees - Note 4 62,334 63,400
----------------------------------------------------------------------------------------------------
Distribution and service plan fees - Note 4:
Class A 14,602 16,259
Class B 45,242 40,713
Class C 430 2
----------------------------------------------------------------------------------------------------
Trustees' fees and expenses - Note 1 31,695 24,854
----------------------------------------------------------------------------------------------------
Shareholder reports 20,148 24,819
----------------------------------------------------------------------------------------------------
Legal and auditing fees 14,339 22,706
----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 4 8,334 12,207
----------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 1,070 1,572
Class B 1,635 650
Class C 46 --
----------------------------------------------------------------------------------------------------
Insurance expenses 2,669 5,014
----------------------------------------------------------------------------------------------------
Custodian fees and expenses 2,242 313
----------------------------------------------------------------------------------------------------
Other 1,374 3,725
-------------------------
Total expenses 206,160 216,234
Less expenses paid indirectly - Note 4 (2,102) --
Less reimbursement and assumption of
expenses by OppenheimerFunds, Inc. - Note 4 (67,889) (102,282)
-------------------------
Net expenses 136,169 113,952
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 535,517 553,912
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
REALIZED AND Net realized gain (loss) on:
UNREALIZED GAIN (LOSS) Investments (67,460) 14,709
Closing of futures contracts 45,425 --
--------------------------
Net realized gain (loss) (22,035) 14,709
-------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (185,048) 698,858
--------------------------
Net realized and unrealized gain (loss) (207,083) 713,567
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $328,434 $1,267,479
==========================
</TABLE>
1. The Fund changed its fiscal year end from
December 31 to July 31.
See accompanying Notes to Financial Statements.
9 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
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STATEMENTS OF CHANGES IN NET ASSETS
SEVEN MONTHS
ENDED JULY 31, YEAR ENDED DECEMBER 31,
1996(2) 1995 1994(1)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS Net investment income $535,517 $553,912 $190,459
-----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (22,035) 14,709 (5,176)
-----------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation (185,048) 698,858 (292,491)
--------------------------------------------------
Net increase (decrease)
in net assets resulting from operations 328,434 1,267,479 (107,208)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS Class A (320,924) (359,044) (116,609)
TO SHAREHOLDERS Class B (212,582) (195,257) (73,850)
Class C (2,007) (18) --
-----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (7,650) --
Class B -- (4,513) --
Class C -- (1) --
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL Net increase in net assets resulting from
INTEREST beneficial interest transactions - Note 2:
TRANSACTIONS Class A 2,672,488 4,506,035 4,048,476
Class B 4,601,865 1,958,383 3,111,768
Class C 81,113 49,978 --
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase 7,148,387 7,215,392 6,862,577
-----------------------------------------------------------------------------------------------------------------
Beginning of period 14,077,969 6,862,577 --
--------------------------------------------------
End of period [including undistributed (overdistributed) net
investment income of $(17,852), $(4) and $403, respectively] $21,226,356 $14,077,969 $6,862,577
==================================================
</TABLE>
1. For the period from March 1, 1994
(commencement of operations) to December 31, 1994.
2. The Fund changed its fiscal year end from December 31
to July 31.
See accompanying Notes to Financial Statements.
10 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
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FINANCIAL HIGHLIGHTS
CLASS A CLASS B
------------------------------------ -------------------------------------
SEVEN MONTHS SEVEN MONTHS
ENDED ENDED
JULY 31, YEAR ENDED DECEMBER 31, JULY 31, YEAR ENDED DECEMBER 31,
1996(2) 1995 1994(3) 1996(2) 1995 1994(3)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.26 $10.41 $11.43 $11.25 $10.40 $11.43
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .36 .61 .49 .31 .53 .41
Net realized and unrealized gain (loss) (.16) .86 (1.02) (.16) .86 (1.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .20 1.47 (.53) .15 1.39 (.61)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net investment income (.36) (.61) (.49) (.31) (.53) (.42)
Distributions from net realized gain -- (.01) -- -- (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.36) (.62) (.49) (.31) (.54) (.42)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.10 $11.26 $10.41 $11.09 $11.25 $10.40
==================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(4) 1.80% 14.42% (4.63)% 1.34% 13.59% (5.39)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $11,354 $8,806 $3,877 $9,740 $5,222 $2,986
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $10,036 $6,504 $2,506 $7,774 $4,080 $1,841
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.49%(6) 5.51% 5.57%(6) 4.70%(6) 4.79% 4.76%(6)
Expenses, before reimbursement and voluntary
assumption by the Manager or Distributor(7) 1.64%(6) 1.75% 1.46%(6) 2.40%(6) 2.49% 2.29%(6)
Expenses, net of reimbursement and voluntary
assumption by the Manager or Distributor 0.97%(6) 0.80% 0.31%(6) 1.74%(6) 1.53% 1.14%(6)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 33.1% 7.4% 17.3% 33.1% 7.4% 17.3%
</TABLE>
<TABLE>
<CAPTION>
-------------------------
FINANCIAL HIGHLIGHTS
CLASS C
-------------------------
SEVEN MONTHS
ENDED PERIOD ENDED
JULY 31, DECEMBER 31,
1996(2) 1995(1)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
<S> <C> <C>
Net asset value, beginning of period $11.25 $11.01
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .30 .19
Net realized and unrealized gain (loss) (.16) .25
- --------------------------------------------------------------------------------
Total income (loss) from investment
operations .14 .44
- --------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net investment income (.30) (.19)
Distributions from net realized gain -- (.01)
- --------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.30) (.20)
- --------------------------------------------------------------------------------
Net asset value, end of period $11.09 $11.25
================================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(4) 1.29% 4.07%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $132 $50
- --------------------------------------------------------------------------------
Average net assets (in thousands) $74 $3
- --------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.66%(6) --(5)
Expenses, before reimbursement and voluntary
assumption by the Manager or Distributor(7) 2.48%(6) --(5)
Expenses, net of reimbursement and voluntary
assumption by the Manager or Distributor 1.81%(6) --(5)
- --------------------------------------------------------------------------------
Portfolio turnover rate(8) 33.1% 7.4%
</TABLE>
1. For the period from August 29, 1995 (inception of offering) to December 31,
1995.
2. The Fund changed its fiscal year end from December 31 to July 31.
3. For the period from March 1, 1994 (commencement of operations) to December
31, 1994.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
5. Ratios during this period would not be indicative of future results.
6. Annualized.
7. Beginning in fiscal 1995, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
8. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended July 31, 1996 were $13,014,523 and $5,699,401,
respectively.
See accompanying Notes to Financial Statements.
11 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer New Jersey Tax-Exempt Fund (the Fund) is a separate series of
Oppenheimer Multi-State Tax-Exempt Trust, a non-diversified, open-end
management investment company registered under the Investment Company Act
of 1940, as amended. On June 6, 1996, the Board of Trustees elected to
change the fiscal year end of the Fund from December 31 to July 31.
Accordingly, these financial statements include information for the seven
month period from January 1, 1996 to July 31, 1996. The Fund's investment
objective is to seek as high a level of current income exempt from federal
and New Jersey income taxes for individual investors that is consistent
with preservation of capital. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and
Class C shares. Class A shares are sold with a front-end sales charge.
Class B and Class C shares may be subject to a contingent deferred sales
charge. All classes of shares have identical rights to earnings, assets and
voting privileges, except that each class has its own distribution and/or
service plan, expenses directly attributable to a particular class and
exclusive voting rights with respect to matters affecting a single class.
Class B shares will automatically convert to Class A shares six years after
the date of purchase. The following is a summary of significant accounting
policies consistently followed by the Fund.
INVESTMENT VALUATION. Portfolio securities are valued at the close of the
New York Stock Exchange on each trading day. Listed and unlisted securities
for which such information is regularly reported are valued at the last
sale price of the day or, in the absence of sales, at values based on the
closing bid or asked price or the last sale price on the prior trading day.
Long-term and short-term "non-money market" debt securities are valued by a
portfolio pricing service approved by the Board of Trustees. Such
securities which cannot be valued by the approved portfolio pricing service
are valued using dealer-supplied valuations provided the Manager is
satisfied that the firm rendering the quotes is reliable and that the
quotes reflect current market value, or are valued under consistently
applied procedures established by the Board of Trustees to determine fair
value in good faith. Short-term "money market type" debt securities having
a remaining maturity of 60 days or less are valued at cost (or last
determined market value) adjusted for amortization to maturity of any
premium or discount.
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses
(other than those attributable to a specific class) and gains and losses
are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses
directly attributable to a specific class are charged against the
operations of that class.
FEDERAL TAXES. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement
plan for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During
the seven months ended July 31, 1996, a provision of $27,570 was made for
the Fund's projected benefit obligations, and payments of $1,011 were made
to retired trustees, resulting in an accumulated liability of $38,835 at
July 31, 1996.
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends
separately for Class A, Class B and Class C shares from net investment
income each day the New York Stock Exchange is open for business and pay
such dividends monthly. Distributions from net realized gains on
investments, if any, will be declared at least once each year.
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income
(loss) and net realized gain (loss) may differ for financial statement and
tax purposes primarily because of premium amortization for tax purposes.
The character of the distributions made during the year from net investment
income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gain (loss) was
recorded by the Fund.
12 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
During the seven months ended July 31, 1996, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during
the seven months ended July 31, 1996, amounts have been reclassified to
reflect a decrease in paid-in capital of $55, a decrease in undistributed
net investment income of $17,852, and a decrease in accumulated net
realized loss on investments of $17,907.
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Original issue discount on
securities purchased is amortized over the life of the respective
securities, in accordance with federal income tax requirements. For bonds
acquired after April 30, 1993, on disposition or maturity, taxable ordinary
income is recognized to the extent of the lesser of gain or market discount
that would have accrued over the holding period. Realized gains and losses
on investments and unrealized appreciation and depreciation are determined
on an identified cost basis, which is the same basis used for federal
income tax purposes. The Fund concentrates its investments in New Jersey
and, therefore, may have more credit risks related to the economic
conditions of New Jersey than a portfolio with a broader geographical
diversification.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
SEVEN MONTHS ENDED JULY 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1996(3) 1995(2) 1994(1)
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Class A:
<S> <C> <C> <C> <C> <C> <C>
Sold 325,900 $3,619,573 491,477 $ 5,411,078 447,660 $4,853,160
Dividends reinvested 19,711 217,924 21,117 233,177 6,784 72,067
Redeemed (104,674) (1,165,009) (102,930) (1,138,220) (81,834) (876,751)
--------- ----------- ---------- ------------ -------- -----------
Net increase 240,937 $2,672,488 409,664 $ 4,506,035 372,610 $4,048,476
========= =========== ========== ============ ======== ==========
Class B:
Sold 458,042 $5,089,081 257,922 $ 2,845,886 294,677 $3,191,135
Dividends reinvested 12,354 136,326 11,729 129,351 4,335 45,898
Redeemed (56,298) (623,542) (92,736) (1,016,854) (11,833) (125,265)
--------- ----------- ---------- ------------ -------- -----------
Net increase 414,098 $4,601,865 176,915 $ 1,958,383 287,179 $3,111,768
========= =========== ========== ============ ======== ==========
Class C:
Sold 11,763 $ 130,464 4,551 $ 51,000 -- $ --
Dividends reinvested 144 1,592 -- -- -- --
Redeemed (4,501) (50,943) (91) (1,022) -- --
--------- ----------- ---------- ------------ -------- ----------
Net increase 7,406 $ 81,113 4,460 $ 49,978 -- $ --
========= =========== ========== ============ ======== ==========
<FN>
(1)For the period from March 1, 1994 (commencement of operations) to December
31, 1994 for both Class A and Class B shares.
(2)For the year ended December 31, 1995 for Class A and Class B shares, and for
the period from August 29, 1995(inception of offering), to December 31,
1995, for Class C shares.
(3)The Fund changed its fiscal year end from December 31 to July 31.
</FN>
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At July 31, 1996, net unrealized appreciation on investments of $181,943
was composed of gross appreciation of $320,102, and gross depreciation of
$138,159.
13 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of 0.60%
on the first $200 million of net assets, 0.55% on the next $100 million,
0.50% on the next $200 million, 0.45% on the next $250 million, 0.40% on
the next $250 million and 0.35% on net assets in excess of $1 billion. The
Manager has agreed to assume Fund expenses (with specified exceptions) in
excess of the most stringent applicable regulatory limit on Fund expenses.
In addition, the Manager has voluntarily undertaken to assume Fund expenses
to the level needed to maintain a stable dividend.
For the seven months ended July 31, 1996, commissions (sales charges paid
by investors) on sales of Class A shares totaled $104,007, of which $19,481
was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of
the Manager, as general distributor, and by an affiliated broker/dealer.
Sales charges advanced to broker/dealers by OFDI on sales of the Fund's
Class B and Class C shares totaled $196,077 and $1,174, of which $4,261 was
paid to an affiliated broker/dealer for Class B shares. During the seven
months ended July 31, 1996, OFDI received contingent deferred sales charges
of $13,422 upon redemption of Class B shares as reimbursement for sales
commissions advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are
allocated ratably to these companies.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service
and maintenance of accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed .25% (voluntarily reduced
to 0.15% by the Fund's Board) of the average annual net assets of Class A
shares of the Fund. OFDI uses the service fee to reimburse brokers,
dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold
Class A shares.
The Fund has adopted a reimbursement type Distribution and Service Plan for
Class B shares to reimburse OFDI for its services and costs in distributing
Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI
an annual asset-based sales charge of 0.75% per year on Class B shares that
are outstanding for 6 years or less. OFDI also receives a service fee of
0.25% (voluntarily reduced to 0.15% by the Fund's Board) per year to
reimburse dealers for providing personal services for accounts that hold
Class B shares. Both fees are computed on the average annual net assets of
Class B shares, determined as of the close of each regular business day. If
the Plan is terminated by the Fund, the Board of Trustees may allow the
Fund to continue payments of the asset-based sales charge to OFDI for
certain expenses it incurred before the Plan was terminated. During the
seven months ended July 31, 1996, OFDI retained $37,850 as reimbursement
for Class B sales commissions and service fee advances, as well as
financing costs. As of July 31, 1996, OFDI had incurred unreimbursed
expenses of $438,267 for Class B.
The Fund has adopted a compensation type Distribution and Service Plan for
Class C shares to compensate OFDI for its services and costs in
distributing Class C shares and servicing accounts. Under the Plan, the
Fund pays OFDI an annual asset-based sales charge of 0.75% per year on
Class C shares. OFDI also receives a service fee of 0.25% (voluntarily
reduced to 0.15% by the Fund's Board) per year to compensate dealers for
providing personal services for accounts that hold Class C shares. Both
fees are computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. If the Plan is
terminated by the Fund, the Board of Trustees may allow the Fund to
continue payments of the asset-based sales charge to OFDI for certain
expenses it incurred before the Plan was terminated. As of July 31, 1996,
OFDI had incurred unreimbursed expenses of $2,768 for Class C.
5. FUTURES CONTRACTS
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates or for purposes of
duration management. The Fund may also buy or write put or call options on
these futures contracts.
14 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin)
are made or received by the Fund each day. The variation margin payments
are equal to the daily changes in the contract value and are recorded as
unrealized gains and losses. The Fund recognizes a realized gain or loss
when the contract is closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
or payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the
value of the contract or option may not correlate with changes in the value
of the underlying securities.
At July 31, 1996, the Fund had outstanding futures contracts to purchase
debt securities as follows:
<TABLE>
<CAPTION>
Number of Valuation as of Unrealized
Expiration Date Futures Contracts July 31, 1996 Appreciation
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Bonds 9/96 10 $1,129,063 $39,376
</TABLE>
15 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer Multi-State
Tax-Exempt Trust:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer New Jersey Tax-Exempt Fund (a series of
Oppenheimer Multi-State Tax-Exempt Trust) as of July 31, 1996, and the
statements of operations for the seven month period then ended and the year
ended December 31, 1995, the statements of changes in net assets for the
seven month period ended July 31, 1996 and the years ended December 31,
1995 and 1994, and the financial highlights for the seven month period
ended July 31, 1996, the year ended December 31, 1995 and the period from
March 1, 1994 (commencement of operations) to December 31, 1994. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1996, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed
other auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Oppenheimer New Jersey Tax-Exempt Fund as of July 31, 1996, the results
of its operations for the seven month period then ended and the year ended
December 31, 1995, the changes in its net assets for the seven month period
ended July 31, 1996 and the years ended December 31, 1995 and 1994, and the
financial highlights for the seven month period ended July 31, 1996, the
year ended December 31, 1995 and the period from March 1, 1994
(commencement of operations) to December 31, 1994, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
August 21, 1996
16 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1997, shareholders will receive information regarding all
dividends and distributions paid to them by the Fund during calendar year
1996. Regulations of the U.S. Treasury Department require the Fund to
report this information to the Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended July
31, 1996 are eligible for the corporate dividend-received deduction. The
dividends were derived from interest on municipal bonds and are not subject
to federal income tax. To the extent a shareholder is subject to any state
or local tax laws, some or all of the dividends received may be taxable.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance.
17 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
OPPENHEIMER NEW JERSEY TAX-EXEMPT FUND
A Series of Oppenheimer Multi-State Tax-Exempt Trust
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of
Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Caryn R. Halbrecht, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISOR OppenheimerFunds, Inc.
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
TRANSFER AND OppenheimerFunds Services
SHAREHOLDER SERVICING
AGENT
CUSTODIAN OF Citibank, N.A.
PORTFOLIO SECURITIES
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of Oppenheimer New Jersey
Tax-Exempt Fund. This report must be preceded or accompanied by a
Prospectus of Oppenheimer New Jersey Tax-Exempt Fund. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, and are not insured by the FDIC or any
other agency, and involve investment risks, including possible loss of the
principal amount invested.
18 Oppenheimer New Jersey Tax-Exempt Fund
