CMA CONNECTICUT
MUNICIPAL MONEY FUND
Annual Report
March 31, 1998
MERRILL LYNCH BULL LOGO
OFFICERS AND TRUSTEES
Arthur Zeikel--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Terry K. Glenn--Executive Vice President
Vincent R. Giordano--Senior Vice President
Edward J. Andrews--Vice President
Donald C. Burke--Vice President
Peter J. Hayes--Vice President
Kenneth A. Jacob--Vice President
Steven T. Lewis--Vice President
Darrin J. SanFillippo--Vice President
Kevin A. Schiatta--Vice President
Helen Marie Sheehan--Vice President
Gerald M. Richard--Treasurer
Robert Harris--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
[FN]
*For inquiries regarding your CMA account, call
(800) CMA-INFO [(800) 262-4636].
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance, which will fluctuate. The Fund
seeks to maintain a consistent $1.00 net asset value per share,
although this cannot be assured. An investment in the Fund is
neither insured nor guaranteed by the US Government. Statements and
other information herein are as dated and are subject to change.
CMA Connecticut
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 1998, CMA Connecticut Municipal Money
Fund paid shareholders a net annualized yield of 2.93%.* As of March
31, 1998, the Fund's 7-day yield was 2.85%.
Economic Environment and
Investment Strategy
For the six-month period ended March 31, 1998, US credit and equity
markets continued to post solid gains. The US Treasury market
benefited from the continuing problems in Pacific Rim economies, a
strong US dollar and weaker US exports, thus moving prices sharply
higher by mid-January 1998. Stock prices also rose with the Dow
Jones Industrial Average gaining 11% as investors began to view the
problems in Asia as having little impact on the continued strength
of the domestic economy. The US economy, led by housing,
transportation and consumer demand, continued to register above-
trend growth. The credit markets retraced some earlier gains as the
period closed with investors becoming concerned that the Federal
Reserve Board may have to raise short-term interest rates as early
as the second quarter of 1998 if the economy continues to grow at
its current pace. The yield on the 30-year US Treasury bond ended
the period at 5.94%, down 45 basis points (0.45%) from September 30,
1997 but off the six-month period low of 5.69%. The one-year US
Treasury bill ended March 31, 1998 at 5.40%, slightly lower than at
September 30, 1997 and off the period low of 5.18% recorded in early
January 1998.
During the six-month period ended March 31, 1998, the short-term
municipal market experienced strong asset growth with assets in tax-
exempt money funds increasing by 14.3% to $172.5 billion from $150.8
billion at September 30, 1997. By mid-period, strong demand lowered
the yield on MIG1-rated municipal notes with a June 1998 maturity to
3.45% from 3.75% at the beginning of the period. The yield on 7-day
variable rate notes also fell, registering an average 2.81% yield
compared to 3.72% at the beginning of the period.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
We maintained a neutral average portfolio maturity of 35 days--45
days during the six months ended March 31, 1998, which provided the
flexibility to adjust to changing market conditions. The shape of
the short-term municipal yield curve remained flat, offering little
incentive to extend the Fund's average life. We continued to utilize
the Fund's tax-exempt commercial paper and municipal note holdings
to manage its average portfolio maturity. We were able to lock in
attractive yields through investments in tax-exempt commercial paper
during periods of strong investor demand. Our focus in the note
sector concentrated in the six-month--nine-month maturity range.
This range offered the best opportunities to provide solid credit
quality and diversification, while limiting interest rate exposure.
Our investment strategy for the 12-month period ended March 31, 1998
enabled us to achieve a gross yield better than the average of
similar Connecticut tax-exempt money funds for the same period,
while maintaining a stable net asset value.
A strong Connecticut economy added 33,800 jobs in 1997 and lowered
the state's unemployment rate to 4.7%. Leading the way as two
important job growth leaders were the gaming and finance industries.
Connecticut Governor John Rowland is facing re-election in 1998 and
has proposed $300 million in tax cuts for the upcoming legislative
session. The largest cut, $200 million, would be in the state income
tax, which was instituted in 1991 and generated an estimated $3.4
billion in the current fiscal year. Short-term municipal issuance
within Connecticut decreased to $175.5 million during the six months
ended March 31, 1998 from $355.4 million issued in the previous six-
month period.
In the upcoming months, investors will watch closely data from the
second and third quarters of 1998 on the US economy as they look for
signs that Asian economic problems are impacting domestic growth and
the possible future course of short-term interest rates. Short-term
municipal market investors will focus on three areas during the
upcoming six months. First, money funds typically experience sizable
outflows beginning in mid-April because of income tax-related
payments. Variable rate note yields tend to move higher during this
period as dealers raise interest rates to control inventories. The
Fund is currently well positioned to take advantage of the
anticipated higher yields. Second, the June--August period is
historically one of heavy note issuance with several large issuers,
including the states of California and Texas, expected to enter the
market. The Fund's average portfolio maturity is likely to increase
modestly during this period, as we anticipate being active in the
Connecticut note market. Finally, the Securities and Exchange
Commission has issued new technical amendments to Rule 2a-7, which
are the guidelines governing money market funds. The new guidelines
are to take effect on July 1, 1998 and will impose new
diversification requirements for state-specific money funds.
However, we do not anticipate a need for changes to the Fund's
portfolio strategy or structure to comply with the new regulations.
In Conclusion
We appreciate your continued interest in CMA Connecticut Municipal
Money Fund, and we look forward to serving your investment needs in
the future.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Steven T. Lewis)
Steven T. Lewis
Vice President and Portfolio Manager
May 4, 1998
Portfolio Abbreviations for CMA Connecticut Municipal Money Fund
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
CP Commercial Paper
GO General Obligation Bonds
HFA Housing Finance Agency
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
MSTR Municipal Securities Trust Receipts
PCR Pollution Control Revenue Bonds
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
CMA CONNECTICUT MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Connecticut-- $ 4,735 Bethel, Connecticut, BAN, UT, 4% due 7/10/1998 $ 4,737
77.7% 21,750 Connecticut State Development Authority, Health Care Revenue Bonds
(Independent Living Project), VRDN, 3.50% due 7/01/2015 (a) 21,750
4,135 Connecticut State Development Authority, IDB (Connecticut Spring and
Stamping Corporation), VRDN, AMT, 3.60% due 9/01/2008 (a) 4,135
4,000 Connecticut State Development Authority, IDR (Handy and Harman Refining),
VRDN, AMT, 3.60% due 12/01/2017 (a) 4,000
Connecticut State Development Authority, PCR, Refunding, VRDN (a):
32,350 (Connecticut Light & Power Co. Project), Series A, 3.65% due 9/01/2028 32,350
1,000 (United Illuminating Co. Project), 3.65% due 6/01/2026 1,000
20,100 (Western Massachusetts Electric Co.), Series A, 3.35% due 9/01/2028 20,100
8,000 Connecticut State Development Authority Revenue Bonds (Solid Waste Project),
VRDN, AMT, 3.40% due 8/01/2023 (a) 8,000
3,575 Connecticut State, GO, Series B, 4.50% due 10/01/1998 3,591
14,500 Connecticut State, GO, VRDN, UT, Series B, 3.65% due 5/15/2014 (a) 14,500
Connecticut State, HFA (Housing Mortgage Finance Program), AMT, CP, Series D:
3,375 3.80% due 4/07/1998 3,375
4,500 3.45% due 6/01/1998 4,500
4,450 3.45% due 6/09/1998 4,450
4,500 3.40% due 6/12/1998 4,500
4,505 3.50% due 8/14/1998 4,505
Connecticut State Health and Educational Facilities Authority Revenue Bonds:
5,000 (Hospital of St. Raphael), VRDN, Series J, 3.45% due 7/01/2022 (a) 5,000
3,300 (Saint Mary's Hospital), Issue B, 7.80% due 7/01/1998 (c) 3,398
1,000 (Sharon Hospital Issue), VRDN, Series A, 3.50% due 7/01/2027 (a) 1,000
2,815 (Yale--New Haven Hospital), Series E, 3.80% due 6/01/1998 (b) 2,815
3,500 (Yale University), CP, Series P, 3.65% due 4/07/1998 3,500
4,000 (Yale University), CP, Series P, 3.70% due 4/07/1998 4,000
2,500 (Yale University), CP, Series P, 3.30% due 6/09/1998 2,500
3,200 (Yale University), CP, Series P, 3.40% due 8/11/1998 3,200
3,500 (Yale University), CP, Series P, 3.40% due 8/14/1998 3,500
17,300 (Yale University), VRDN, Series T, 3.65% due 7/01/2029 (a) 17,300
11,200 (Yale University), VRDN, Series T, 3.70% due 7/01/2029 (a) 11,200
Connecticut State Municipal Electric Energy Cooperative, Power Supply
System Revenue Bonds, CP, Series A:
1,500 3.15% due 5/01/1998 1,500
2,300 3.20% due 5/13/1998 2,300
3,900 3.30% due 6/01/1998 3,900
11,505 Connecticut State Refunding (Economic Recovery Notes), UT, 5% due 6/15/1998 11,534
19,900 Connecticut State Special Assessment Unemployment Compensation, Advanced
Fund Revenue Bonds (Connecticut Unemployment), Series C, 3.90% due
7/01/1998 (b) 19,900
28,050 Connecticut State Special Tax Obligation Revenue Bonds (Transportation
Infrastructure), VRDN, Second Lien, Series 1, 3.65% due 12/01/2010 (a) 28,050
</TABLE>
<TABLE>
CMA CONNECTICUT MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Connecticut $ 6,050 Danbury, Connecticut, BAN, UT, 4% due 8/07/1998 $ 6,062
(concluded) 8,000 Eagle Tax-Exempt Trust, Connecticut State, VRDN, Series 94, Class 0701,
3.70% due 10/07/1998 (a) 8,000
East Haven, Connecticut, BAN, UT:
6,000 4.25% due 7/15/1998 6,007
1,500 4% due 9/01/1998 1,501
5,600 East Lyme, Connecticut, BAN, UT, 4% due 2/17/1999 5,624
4,600 Hartford, Connecticut, Redevelopment Agency, M/F Mortgage Revenue Refunding
Bonds (Housing-Underwood Tower Project), VRDN, 3.50% due 6/01/2020 (a)(d) 4,600
7,900 New Britain, Connecticut, BAN, VRDN, 3.40% due 4/14/1998 (a) 7,900
6,000 New Canaan, Connecticut, BAN, UT, 3.75% due 3/09/1999 6,016
2,500 Norwalk, Connecticut, BAN, UT, 4% due 7/15/1998 2,502
3,850 Plymouth, Connecticut, BAN, 4.25% due 8/06/1998 3,858
3,600 Prospect, Connecticut, BAN, UT, 3.90% due 4/15/1998 3,600
1,800 Shelton, Connecticut, Housing Authority Revenue Bonds (Crosby Commons
Project), VRDN, 3.60% due 1/01/2031 (a) 1,800
12,500 Stamford, Connecticut, BAN, UT, 4% due 4/01/1998 12,500
8,400 Stamford, Connecticut, Housing Authority Revenue Bonds (Morgan Street
Project), VRDN, AMT, 3.65% due 8/01/2024 (a) 8,400
4,750 Watertown, Connecticut, BAN, UT, 3.50% due 9/22/1998 4,753
4,500 Westport, Connecticut, BAN, UT, Series A, 4% due 6/26/1998 4,503
4,400 Winchester, Connecticut, BAN, 4% due 8/04/1998 4,405
Puerto Rico-- Eagle Tax-Exempt Trust, VRDN (a):
19.2% 9,900 Puerto Rico Housing Finance Corp., 3.70% due 10/01/2011 9,900
7,200 Puerto Rico M/F Mortgage, Series C, 3.70% due 10/01/2011 7,200
Puerto Rico Commonwealth, Government Development Bank Revenue Bonds:
4,300 CP, 3.10% due 4/07/1998 4,300
4,300 CP, 3.10% due 4/08/1998 4,300
4,300 CP, 3.10% due 4/09/1998 4,300
300 Refunding, VRDN, 3.375% due 12/01/2015 (a)(e) 300
3,000 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Bonds, VRDN, Series X, 3.375% due 7/01/1999 (a) 3,000
8,000 Puerto Rico Commonwealth, TRAN, Series A, 4.50% due 7/30/1998 8,020
27,450 Puerto Rico Electric Power Authority, Power Revenue Bonds, MSTR, VRDN,
Series SGA-43, 3.60% due 7/01/2022 (a)(e) 27,450
Puerto Rico Industrial, Medical and Environmental Pollution Control Facilities
Financing Authority Revenue Bonds, CP:
3,400 3.25% due 6/09/1998 3,400
1,850 3.80% due 9/01/1998 1,851
3,400 3.25% due 6/01/1998 3,400
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control
Facilities Financing Authority, Higher Education Revenue Bonds, Series A:
6,800 (Ana G. Mendez University System Project), VRDN, 3.45% due 1/01/2015 (a) 6,800
3,100 CP, 3.70% due 4/07/1998 3,100
Total Investments (Cost--$439,442*)--96.9% 439,442
Other Assets Less Liabilities--3.1% 13,853
--------
Net Assets--100.0% $453,295
========
<FN>
(a)The interest rate is subject to change periodically based on
certain indexes. The interest rate shown is the rate in effect at
March 31, 1998.
See Notes to Financial Statements.
(b)FGIC Insured.
(c)Prefunded.
(d)FSA Insured.
(e)MBIA Insured.
*Cost for Federal income tax purposes.
</TABLE>
<TABLE>
CMA CONNECTICUT MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1998
<S> <C> <C>
Assets:
Investments, at value (identified cost--$439,441,751) (Note 1a) $ 439,441,751
Cash 34,787
Receivables:
Securities sold $ 11,006,685
Interest 3,205,454 14,212,139
--------------
Prepaid registration fees and other assets (Note 1d) 18,412
--------------
Total assets 453,707,089
--------------
Liabilities:
Payables:
Investment adviser (Note 2) 200,125
Distributor (Note 2) 122,594 322,719
--------------
Accrued expenses and other liabilities 89,563
--------------
Total liabilities 412,282
--------------
Net Assets $ 453,294,807
==============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of
shares authorized $ 45,347,315
Paid-in capital in excess of par 408,125,832
Accumulated realized capital losses--net (Note 4) (178,340)
--------------
Net Assets--Equivalent to $1.00 per share based on 453,473,147 shares of
beneficial interest outstanding $ 453,294,807
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA CONNECTICUT MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1998
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 13,063,026
Expenses:
Investment advisory fees (Note 2) $ 1,826,850
Distribution fees (Note 2) 454,599
Accounting services (Note 2) 62,364
Registration fees (Note 1d) 56,680
Professional fees 51,399
Transfer agent fees (Note 2) 45,897
Custodian fees 31,463
Pricing fees 4,989
Trustees' fees and expenses 2,643
--------------
Total expenses 2,536,884
--------------
Investment income--net 10,526,142
Realized Loss on Investments--Net (Note 1c) (39,858)
--------------
Net Increase in Net Assets Resulting from Operations $ 10,486,284
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA CONNECTICUT MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
March 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <C> <C>
Operations:
Investment income--net $ 10,526,142 $ 8,580,599
Realized loss on investments--net (39,858) (7,261)
-------------- --------------
Net increase in net assets resulting from operations 10,486,284 8,573,338
-------------- --------------
Dividends to Shareholders (Note 1e):
Investment income--net (10,523,142) (8,579,669)
-------------- --------------
Net decrease in net assets resulting from dividends
to shareholders (10,523,142) (8,579,669)
-------------- --------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 1,405,810,520 1,090,795,423
Net asset value of shares issued to shareholders in reinvestment of dividends
(Note 1e) 10,523,097 8,579,691
-------------- --------------
1,416,333,617 1,099,375,114
Cost of shares redeemed (1,302,932,701) (1,072,800,492)
-------------- --------------
Net increase in net assets derived from beneficial interest transactions 113,400,916 26,574,622
-------------- --------------
Net Assets:
Total increase in net assets 113,364,058 26,568,291
Beginning of year 339,930,749 313,362,458
-------------- --------------
End of year $ 453,294,807 $ 339,930,749
============== ==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA CONNECTICUT MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Investment income--net .03 .03 .03 .03 .02
-------- -------- -------- -------- --------
Total from investment operations .03 .03 .03 .03 .02
-------- -------- -------- -------- --------
Less dividends from investment income--net (.03) (.03) (.03) (.03) (.02)
-------- -------- -------- -------- --------
Net assets value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Investment Return 2.93% 2.81% 3.01% 2.54% 1.77%
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses .69% .71% .72% .71% .70%
======== ======== ======== ======== ========
Investment income--net 2.88% 2.76% 2.97% 2.53% 1.76%
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of year (in thousands) $453,295 $339,931 $313,362 $260,398 $250,038
======== ======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
CMA CONNECTICUT MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Connecticut Municipal Money Fund (the "Fund") is part of CMA
Multi-State Municipal Series Trust (the "Trust"). The Fund is
registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. The following
is a summary of significant accounting policies followed by the
Fund.
(a) Valuation of investments--Investments are valued at amortized
cost, which approximates market value. For the purpose of valuation,
the maturity of a variable rate demand instrument is deemed to be
the next coupon date on which the interest rate is to be adjusted.
In the case of a floating rate instrument, the remaining maturity is
the demand notice payment period.
(b) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
premium and discount) is recognized on the accrual basis. Realized
gains and losses on security transactions are determined on the
identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends and distributions to shareholders--The Fund declares
dividends daily and reinvests daily such dividends (net of non-
resident alien tax and back-up withholding tax withheld) in
additional fund shares at net asset value. Dividends are declared
from the total of net investment income, excluding discounts earned
other than original issue discounts. Net realized capital gains, if
any, are normally distributed annually after deducting prior years'
loss carryforward. The Fund may distribute capital gains more
frequently than annually in order to maintain the Fund's net asset
value at $1.00 per share.
(f) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of $3,000
have been reclassified between accumulated net realized capital
losses and undistributed net investment income. These
reclassifications have no effect on net assets or net asset value
per share.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets, at the following annual rates: 0.50%
of the first $500 million of average daily net assets; 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.
CMA CONNECTICUT MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") receives a
distribution fee from the Fund at the end of each month at the
annual rate of 0.125% of average daily net assets of the Fund. The
distribution fee is to compensate MLPF&S financial consultants and
other directly involved branch office personnel for selling shares
of the Fund and for providing direct personal services to
shareholders. The distribution fee is not compensation for the
administrative and operational services rendered to the Fund by
MLPF&S in processing share orders and administering shareholder
accounts.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLFDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the period
corresponds to the amounts included in the Statements of Changes in
Net Assets for net proceeds from sale of shares and cost of shares
redeemed, respectively, since shares are recorded at $1.00 per
share.
4. Capital Loss Carryforward :
At March 31, 1998, the Fund had a net capital loss carryforward of
approximately $178,000, of which $69,000 expires in 2000, $30,000
expires in 2001, $10,000 expires in 2002, $27,000 expires in 2003,
$2,000 expires in 2005 and $40,000 expires in 2006. This amount will
be available to offset like amounts of any future taxable gains.
<AUDIT-REPORT>
CMA CONNECTICUT MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA Connecticut Municipal Money Fund of
CMA Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of CMA
Connecticut Municipal Money Fund of CMA Multi-State Municipal Series
Trust as of March 31, 1998, the related statements of operations for
the year then ended and changes in net assets for each of the years
in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended. These
financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the 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 the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
sup- porting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned
at March 31, 1998 by correspondence with the custodian. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
CMA Connecticut Municipal Money Fund of CMA Multi-State Municipal
Series Trust as of March 31, 1998, the results of its operations,
the changes in its net assets, and the financial highlights for the
respective stated periods in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 4, 1998
</AUDIT-REPORT>
CMA CONNECTICUT MUNICIPAL MONEY FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA
Connecticut Municipal Money Fund of CMA Multi-State Municipal Series
Trust during its taxable year ended March 31, 1998 qualify as tax-
exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund
during the year.
Please retain this information for your records.
