CMA
CMA MICHIGAN
MUNICIPAL MONEY FUND
Annual Report
March 31, 1996
Merrill Lynch
BULL LOGO
<PAGE>
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
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 1713
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.
<PAGE>
CMA Michigan
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
To Our Shareholders:
For the year ended March 31, 1996, CMA Michigan Municipal Money Fund
paid shareholders a net annualized yield of 3.13%*. As of March 31,
1996, the Fund's 7-day yield was 2.72%.
The Environment
As 1995 drew to a close and 1996 began, it appeared that the US
economy was losing momentum. Lackluster retail sales, increases in
initial unemployment claims (along with weak job and income growth),
and evidence of slowing in the manufacturing sector all suggested
that the rate of economic growth was slowing, with some forecasters
even suggesting the possibility of an imminent recession. With
inflationary pressures well subdued, these signs of economic
weakness led the Federal Reserve Board to follow a more
accommodative monetary policy.
However, investor perceptions regarding the rate of future economic
growth changed dramatically with the report of stronger-than-
expected employment data for February and March. As a result, the
consensus outlook regarding the direction of business activity
shifted from expectations of weakness to anticipation of a revival
in growth of the economy. Long-term interest rates rose, and the
Federal Reserve Board left monetary policy on hold.
Investors are likely to continue to focus on the probable direction
of economic activity and Federal Reserve Board monetary policy in
the weeks ahead. At this time, inflationary pressures do not seem to
be building and the manufacturing sector is still relatively weak,
which suggest that the economy is not on the verge of overheating.
Nevertheless, it is likely that any further indication of stronger
economic activity in the weeks ahead may add to investor concerns
that accelerating economic activity could lead to higher interest
rates.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
<PAGE>
Investment Outlook and Strategy
Michigan's booming economy led to a 2% income tax refund of $113
million for fiscal year 1996. The one-time refund was triggered by
State tax revenues in fiscal 1995 that exceeded the limit
established by an amendment to the Michigan constitution. The
amendment limits tax collections to 9.5% of personal income in the
State. The $71 million remaining after the tax refund will be placed
in the State's Budget Stabilization Fund, which already contains
$1.1 billion.
During the six-month period ended March 31, 1996, the State's
unemployment rate remained below the national rate. Governor John
Engler stated that during the six-month period Michigan accounted
for one of every five jobs created nationwide. However, although
Michigan tries to diversify its economy, it is still very cyclical
and tied to the automobile industry. Thus, as the national economy
begins to slow down economists predict the State's jobless rate
could jump from a low of 4.4% in October to 5.5% by the end of
March. For example, General Motors Corp. will build 6% fewer cars
and trucks while Ford Motor Company estimates that production will
decline by 4% compared to the same quarter a year ago. Furthermore,
in February for the fifth time in six months the State conference
board reported a decline in consumer confidence. This lack of faith
could further slow consumer spending for big-ticket items such as
automobiles, despite the Federal Reserve Board's interest rate cuts
in December and January.
Although weak economic data continued to portray a slowing national
economy, the short-term tax-exempt yield curve remained relatively
flat for the first half of the six-month period ended March 31,
1996. Therefore, CMA Michigan Municipal Money Fund maintained a
relatively neutral average portfolio maturity for most of the
period. However, as sluggish holiday sales confirmed weakness in the
economy, we extended the Fund's average maturity to the 55-day range
by December 31, 1995. In both December 1995 and January 1996, the
Federal Reserve Board responded to this weakness by lowering the
Federal Funds rate 25 basis points (0.25%) at each Federal Open
Market Committee meeting. The Fund benefited from its maturity
extension during the second half of the six-month period ended March
31, 1996 because the fall in yields on Michigan's variable rate
demand obligations caused a steepening short-term yield curve. The
Fund, which began the six-month period in the 60-day range,
concluded the six-month period in the 35-day range to take advantage
of the expected increase in interest rates caused by outflows during
tax time. During the six-month period ended March 31, 1996,
Michigan's short-term issuance totaled $951 million, an increase
from the $688 million issued during the previous six-month period. A
majority of this was $900 million Michigan general obligation notes
which mature September 30, 1996. These notes are secured by a pledge
of undedicated State revenues and will be used to fund temporary
cash flow imbalances during fiscal year 1996.
<PAGE>
In Conclusion
We thank you for your support of CMA Michigan 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
(Darrin J. San Fillippo)
Darrin J. San Fillippo
Portfolio Manager
April 25, 1996
Portfolio Abbreviations for CMA Michigan Municipal Money Fund
<PAGE>
AMT Alternative Minimum Tax (subject to)
CP Commercial Paper
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
S/F Single-Family
TAN Tax Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1996 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Michigan-- $ 1,025 Bedford Township, Michigan, Economic Development Corp. Revenue Bonds
97.9% (Form-Tech Steel Inc. Project), VRDN, 3.65% due 3/01/2010 (a) $ 1,025
2,100 Cornell Township, Michigan, Economic Development Corp., IDR, CP,
Refunding (Mead-Escambia Paper Co.), 3.20% due 4/17/1996 2,100
Delta County, Michigan, Economic Development Corp., Environmental
Improvement Revenue Refunding Bonds (Mead-Escambia Paper Co.):
700 CP, Series C, 3.25% due 12/01/2023 700
2,200 VRDN, Series D, 3.40% due 12/01/2023 (a) 2,200
245 Delta Township, Michigan, Economic Development Corp., IDR, Refunding
(Schottenstein Stores), VRDN, 3.45% due 12/01/1997 (a) 245
19,000 Detroit, Michigan, City School District, State School Aid Notes,
4.50% due 5/01/1996 19,011
1,215 Farmington Hills, Michigan, Economic Development Corp., Limited
Obligation Revenue Refunding Bonds (Brookfield Building Association),
VRDN, 3.55% due 11/01/2010 (a) 1,215
2,800 Flint, Michigan, Economic Development Corporation, Economic Development
Revenue Bonds (Plastic Research Corp.), VRDN, 3.60% due 9/01/2004 (a) 2,800
3,400 Genesee County, Michigan, Economic Development Corporation, Limited
Obligation, Economic Development Revenue Bonds (MM&E Inc. Project),
VRDN, 3.60% due 7/01/2005 (a) 3,400
2,300 Georgetown Charter Township, Michigan, IDR, Limited Obligation
(J&F Steel Corp.), VRDN, AMT, 3.45% due 2/01/2009 (a) 2,300
600 Grand Rapids, Michigan, Economic Development Corp., Limited Obligation
Revenue Refunding Bonds (Calder), VRDN, Series A, 3.35% due
10/01/2011 (a) 600
1,000 Grand Rapids, Michigan, Economic Development Corp. Revenue Bonds
(Amway/Grand Plaza Hotel, Facility #1), VRDN, 3.35% due 12/01/2006 (a) 1,000
2,810 Grand Rapids, Michigan, IDR, Refunding (Etheridge Company Project),
VRDN, AMT, 3.45% due 7/01/2009 (a) 2,810
Grand Rapids, Michigan, Water Supply System, Revenue Refunding Bonds:
1,200 7.75% due 1/01/1997 (b) 1,258
800 VRDN, 3.50% due 1/01/2020 (a)(d) 800
1,032 Hesperia, Michigan, Community Schools, State Aid Notes, 4.20% due
5/30/1996 (e) 1,032
7,500 Kalamazoo, Michigan, City School District, State Aid Notes, 4.50%
due 4/01/1996 7,501
4,500 Kalamazoo, Michigan, TAN, 3.75% due 12/31/1996 4,517
1,250 Lakeview, Michigan, Public School District, Macomb County State
Aid Notes, 4.20% due 6/25/1996 (e) 1,251
</TABLE>
<PAGE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1996 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Michigan $ 1,240 Lenawee County, Michigan, Economic Development Corporation, Limited
(continued) Obligation Revenue Bonds (The Wyatt Project), VRDN, 3.65%
due 5/01/2002 (a) $ 1,240
850 Manchester, Michigan, Community Schools, State Aid Notes, 4.05% due
6/28/1996 (e) 850
1,300 Marshall, Michigan, Public Schools District, State Aid Notes, 3.95%
due 6/30/1996 (e) 1,300
1,350 Melvindale, Michigan, Economic Development Corporation, Limited
Obligation Revenue Refunding Bonds (North American Steel Project),
VRDN, 3.30% due 6/01/1998 (a) 1,350
12,005 Michigan Higher Education Student Loan Authority Revenue Bonds, VRDN,
AMT, Series XII-D, 3.85% due 10/01/2015 (a)(c) 12,005
4,285 Michigan Municipal Bond Authority Revenue Notes, Series C, 4.50% due
9/06/1996 4,295
2,860 Michigan State Building Authority Revenue Bonds (Facilities Program I),
4% due 10/01/1996 2,872
250 Michigan State Building Authority, Revenue Refunding Bonds, Series I,
3.75% due 10/01/1996 250
5,000 Michigan State, CP, 3.50% due 5/07/1996 5,000
Michigan State Housing Development Authority, Limited Obligation
Revenue Bonds:
4,000 (Bloomfield), CP, 3.60% due 7/15/1996 4,000
1,100 (Laurel Valley), VRDN, 3.30% due 12/01/2007 (a) 1,100
4,000 (Sandcreek Apartments), VRDN, AMT, 3.60% due 1/01/2029 (a) 4,000
Michigan State Housing Development Authority, M/F Housing Revenue
Bonds, CP, AMT, Series A:
12,345 3.20% due 4/17/1996 12,345
12,345 3.20% due 4/19/1996 12,345
5,225 3.15% due 4/24/1996 5,225
2,135 3.35% due 5/08/1996 2,135
10,500 3.35% due 5/10/1996 10,500
7,245 Michigan State Housing Development Authority, S/F Mortgage Revenue
Bonds, AMT, Series B, 3.50% due 6/01/1996 7,245
7,000 Michigan State Notes, CP, UT, 4% due 9/30/1996 7,022
5,555 Michigan State, Refunding, UT, Series 95, 6.50% due 12/01/1996 5,676
Michigan State Strategic Fund, Limited Obligation Revenue Bonds, VRDN (a):
(Akemi Inc. Project), AMT, 3.50% due 3/01/2021 1,000
1,500 (BCM&N) Project, AMT, 3.45% due 6/01/2020 1,500
3,200 (Baron Drawn Steel), IDR, AMT, 3.65% due 12/01/2006 3,200
2,500 (Cincinnati Milacron Inc. Project), AMT, 3.60% due 4/15/2005 2,500
3,300 (Detroit Edison Co., Reserve 1), 2.70% due 9/01/2030 3,300
5,000 (Dott Industries Inc. Project), AMT, 3.60% due 6/01/2001 5,000
1,500 (Hercules Drawn Steel Project), AMT, 3.65% due 8/01/2006 1,500
2,000 (Ingersoll CM System Inc. Project), AMT, 3.60% due 12/01/2011 2,000
345 (Kay Screen Printing Inc.), AMT, Series A, 3.75% due 1/01/1999 345
4,000 (Methodist Children's Home), 3.40% due 8/01/2015 4,000
3,000 (Midbrook Products Inc., Project), AMT, 3.45% due 10/01/2014 3,000
1,635 (Perfection Steel Inc. Project), AMT, 3.50% due 3/01/2002 1,635
4,850 Refunding (Lake Shore Inc.), AMT, 3.65% due 11/01/2019 4,850
570 Refunding (Park Village Pines Project), 3.30% due 5/01/2006 570
1,860 (Tom Miller Inc. Project), AMT, 3.45% due 12/01/2009 1,860
9,000 (United Waste Systems Inc. Project), AMT, 3.50% due 4/01/2010 9,000
3,000 (Universal Tube, Inc. Project), AMT, 3.60% due 8/01/2011 3,000
</TABLE>
<PAGE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1996 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Michigan $ 8,300 Michigan State Strategic Fund, PCR, Refunding (Consumers Power
(concluded) Project), VRDN, Series A, 3.45% due 4/15/2018 (a) $ 8,300
4,000 Monroe County, Michigan, Economic Development Corp., Limited
Obligation Revenue Refunding Bonds (Detroit Edison Co.), VRDN, Series
CC, 3.25% due 10/01/2024 (a) 4,000
4,200 Monroe County, Michigan, Intermediate School, Special Education,
TAN, 3.75% due 4/03/1996 (e) 4,200
2,000 Niles, Michigan, Community Schools, State Aid Notes, 3.95% due
6/28/1996 (e) 2,000
195 Sterling Heights, Michigan, Economic Development Corp., Limited
Obligation Revenue Refunding Bonds (Sterling Shopping Center), VRDN,
3.50% due 12/01/2010 (a) 195
University of Michigan, University Hospital Revenue Bonds, VRDN,
Series A (a):
5,200 3.60% due 12/01/2027 5,200
4,800 (Medical Service Plan), 3.60% due 12/01/2027 4,800
2,100 Refunding, 3.60% due 12/01/2019 2,100
950 Watervliet, Michigan, Public Schools, State Aid Anticipation Notes,
4.25% due 6/30/1996 (e) 950
4,900 Wayne County, Michigan, Regional Educational Service Agency, State
Aid Notes, 4.13% due 5/30/1996 4,901
1,000 Wyoming, Michigan, Economic Development Corp., Revenue Refunding Bonds
(Family One Inc. Project), VRDN, AMT, 3.45% due 11/01/2019 (a) 1,000
Puerto Rico-- 3,000 Puerto Rico Commonwealth, Government Development Bank, CP, 3.20% due
1.2% 4/24/1996 3,000
Total Investments (Cost--$245,426)--99.1% 245,426
Other Assets Less Liabilities--0.9% 2,118
--------
Net Assets--100.0% $247,544
========
<PAGE>
<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, 1996.
(b)Prerefunded.
(c)AMBAC Insured.
(d)FGIC Insured.
(e)Bank Qualified.
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1996
<S> <C> <C>
Assets:
Investments, at value (identified cost--$245,425,659*) (Note 1a) $ 245,425,659
Cash 90,881
Receivables:
Interest $ 1,929,353
Securities sold 1,320,822 3,250,175
-------------
Deferred organization expenses (Note 1d) 527
Prepaid registration fees and other assets (Note 1d) 31,160
-------------
Total assets 248,798,402
-------------
<PAGE>
Liabilities:
Payables:
Securities purchased 1,000,000
Investment adviser (Note 2) 103,676
Distributor (Note 2) 81,240 1,184,916
-------------
Accrued expenses and other liabilities 69,516
-------------
Total liabilities 1,254,432
-------------
Net Assets $ 247,543,970
=============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares authorized $ 24,767,601
Paid-in capital in excess of par 222,908,405
Accumulated realized capital losses--net (Note 4) (132,036)
-------------
Net Assets--Equivalent to $1.00 per share based on 247,676,006 shares of beneficial
interest outstanding $ 247,543,970
=============
<FN>
*The aggregate cost of investments at March 31, 1996 for Federal
income tax purposes was $245,430,396. As of March 31, 1996, net
unrealized depreciation for Federal income tax purposes aggregated
$4,737, all of which related to depreciated securities.
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1996
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 9,152,675
<PAGE>
Expenses:
Investment advisory fees (Note 2) $ 1,202,870
Distribution fees (Note 2) 299,263
Transfer agent fees (Note 2) 58,902
Accounting services (Note 2) 50,931
Professional fees 48,683
Registration fees (Note 1d) 39,479
Custodian fees 22,853
Printing and shareholder reports 22,423
Amortization of organization expenses (Note 1d) 7,143
Pricing fees 6,219
Trustees' fees and expenses 2,554
Other 5,402
-------------
Total expenses 1,766,722
-------------
Investment income--net 7,385,953
Realized Loss on Investments--Net (Note 1c) (13,976)
-------------
Net Increase in Net Assets Resulting from Operations $ 7,371,977
=============
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended March 31,
Increase (Decrease) in Net Assets: 1996 1995
<S> <C> <C>
Operations:
Investment income--net $ 7,385,953 $ 5,678,287
Realized loss on investments--net (13,976) (50,049)
------------- -------------
Net increase in net assets resulting from operations 7,371,977 5,628,238
------------- -------------
Dividends to Shareholders (Note 1e):
Investment income--net (7,385,953) (5,678,287)
------------- -------------
Net decrease in net assets resulting from dividends to shareholders (7,385,953) (5,678,287)
------------- -------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 1,072,495,850 929,669,029
Net asset value of shares issued to shareholders in reinvestment of dividends
(Note 1e) 7,386,278 5,678,120
------------- -------------
1,079,882,128 935,347,149
Cost of shares redeemed (1,052,494,852) (951,561,384)
------------- -------------
Net increase (decrease) in net assets derived from beneficial interest transactions 27,387,276 (16,214,235)
------------- -------------
<PAGE>
Net Assets:
Total increase (decrease) in net assets 27,373,300 (16,264,284)
Beginning of year 220,170,670 236,434,954
------------- -------------
End of year $ 247,543,970 $ 220,170,670
============= =============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
For the
Period
The following per share data and ratios have been derived April 29,
from information provided in the financial statements. 1991++ to
For the Year Ended March 31, March 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Investment income--net .03 .03 .02 .02 .03
-------- -------- -------- -------- --------
Total from investment operations .03 .03 .02 .02 .03
-------- -------- -------- -------- --------
Less dividends from investment income--net (.03) (.03) (.02) (.02) (.03)
-------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Investment Return 3.13% 2.57% 1.81% 2.24% 3.62%*
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses, net of reimbursement .73% .73% .72% .65% .54%*
======== ======== ======== ======== ========
Expenses .73% .73% .72% .74% .80%*
======== ======== ======== ======== ========
Investment income--net 3.05% 2.54% 1.79% 2.22% 3.53%*
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of period (in thousands) $247,544 $220,171 $236,435 $200,200 $194,433
======== ======== ======== ======== ========
<FN>
*Annualized.
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<PAGE>
CMA MICHIGAN MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Michigan 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) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense on a straight-
line basis over a five-year period. 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 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.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM" or "Adviser"). 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.
<PAGE>
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 MICHIGAN MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
The most restrictive annual expense limitation requires that the
Adviser reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed in any fiscal year 2.5%
of the Fund's first $30 million of average daily net assets, 2.0% of
the Fund's next $70 million of average daily net assets, and 1.5% of
the average daily net assets in excess thereof. No fee payment will
be made to the Adviser during any year which will cause such
expenses to exceed the pro rata expense limitation at the time of
such payment.
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, MLPF&S, 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.
<PAGE>
4. Capital Loss Carryforward:
At March 31, 1996, the Fund had a net capital loss carryforward of
approximately $116,000, of which $62,000 expires in 2001 and $4,000
expires in 2002, and $50,000 expires in 2003. This amount will be
available to offset like amounts of any future taxable gains.
<AUDIT-REPORT>
CMA MICHIGAN MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA Michigan 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 Michigan
Municipal Money Fund of CMA Multi-State Municipal Series Trust as of
March 31, 1996, 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 four-year period then ended and for the period
April 29, 1991 (commencement of operations) to March 31, 1992. 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
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at March
31, 1996 by correspondence with the custodian and broker. 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 Michigan Municipal Money Fund of CMA Multi-State Municipal
Series Trust as of March 31, 1996, 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.
<PAGE>
Deloitte & Touche LLP
Princeton, New Jersey
April 30, 1996
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA
Michigan Municipal Money Fund of CMA Multi-State Municipal Series
Trust during its taxable year ended March 31, 1996 qualify as tax-
exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed during the
Fund's taxable year ended March 31, 1996.
Please retain this information for your records.
