CMA
CMA ARIZONA
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.
CMA Arizona
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
TO OUR SHAREHOLDERS:
<PAGE>
For the year ended March 31, 1996, CMA Arizona Municipal Money Fund
paid shareholders a net annualized yield of 3.36%*. As of March 31,
1996, the Fund's 7-day yield was 2.73%.
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
The Arizona economy, while still strong, is slowing from the boom
conditions which have existed since the second half of 1993.
Although 1995 was the second year of the State's booming economy,
growth rates moderated throughout the year. This reduced growth was
highly evident in the construction sector which experienced the most
pronounced decline because of a reduction in the region's single-
family housing market. Consequently, state officials project that
employment growth, which was up 4.8% in 1995, will continue to slow
in 1996 to 3.6%. Although Arizona's growth is expected to slow along
with the national economy, an anticipated Mexican recovery combined
with a stable manufacturing sector should keep growth positive.
Since Mexico is Arizona's major trading partner, the stability in
the peso and a recovery in the Mexican economy are good news for the
State. In addition, there is a long list of manufacturing companies
either opening major new facilities or expanding existing facilities
in the greater Phoenix area including Intel Corp., Motorola Inc. and
Allied Signal, Inc. The ripple effect of these new and expanded
operations will positively affect the entire State.
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 Arizona 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 portfolio maturity to the 65-
day range by December 1995. In both December 1995 and January 1996,
the Federal Reserve Board responded to this weakness by lowering the
Federal Funds rate by 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 because
yields on Arizona's variable rate demand obligations caused a
steepening short-term yield curve. The Fund, which began the March
period in the 65-day range, concluded the period in the 50-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, Arizona's short-term issuance totaled only $70 million, a
decrease from the $102 million issued during the previous six-month
period. Diversification and credit quality remain important to the
Fund, and we will continue to closely monitor the everchanging
marketplace.
In Conclusion
We thank you for your support of CMA Arizona Municipal Money Fund,
and we look forward to serving your investment needs in the future.
Sincerely,
<PAGE>
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent Giordano)
Vincent Giordano
Senior Vice President
(Darrin J. San Fillippo)
Darrin J. San Fillippo
Portfolio Manager
April 29, 1996
Portfolio Abbreviations for CMA Arizona Municipal Money Fund
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
CP Commercial Paper
DATES Daily Adjustable Tax-Exempt Securities
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
TAN Tax Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
CMA ARIZONA 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>
Arizona-- $ 5,400 Arizona Educational Loan Marketing Corp., Educational Loan Revenue
97.9% Bonds, VRDN, AMT, Series A, 3.60% due 3/01/2015 (a)(c) $ 5,400
Arizona Health Facilities Authority Revenue Bonds (Arizona
Voluntary Hospital Federation), VRDN (a)(d):
1,460 Series A, 3.40% due 10/01/2015 1,460
1,245 Series B, 3.40% due 10/01/2015 1,245
2,500 Arizona State Transportation Board Revenue Bonds (Maricopa County),
7.30% due 7/01/1996 (b) 2,572
Arizona State University Revenue Bonds (b):
1,310 7.10% due 7/01/1996 1,347
1,930 7.20% due 7/01/1996 1,985
5,000 Chandler, Arizona, IDA, IDR, Refunding (SMP II Limited Partnership),
VRDN, 3.45% due 12/01/2015 (a) 5,000
6,000 Cochise County, Arizona, Pollution Control Corp., Solid Waste
Disposal Revenue Bonds (Arizona Electric Power Cooperative, Inc.
Project), AMT, 3.30% due 9/01/1996 6,000
6,600 Coconino County, Arizona, Pollution Control Corp., Arizona Public
Service Revenue Bonds (Navajo Project), VRDN, AMT, Series A, 3.60% due
10/01/2029 (a) 6,600
200 Maricopa County, Arizona, IDA, Hospital Facility Revenue Bonds
(Samaritan Health Service Hospital), VRDN, Series B-2, 3.50% due
12/01/2008 (a)(c) 200
Maricopa County, Arizona, IDA, M/F Housing Revenue Bonds, VRDN, AMT (a):
3,700 (Privado Park Apartments Project), Series A, 3.60% due 6/01/2034 3,700
4,000 (Vista Ventana Apartments Project), Series D, 3.60% due 6/01/2034 4,000
Maricopa County, Arizona, Pollution Control Corp., PCR, CP (Southern
California Edison-Palo Verde Project):
1,400 Series C, 3.35% due 7/10/1996 1,400
500 Series D, 3.40% due 8/22/1996. 500
1,100 Series E, 3.40% due 8/22/1996 1,100
1,500 Series G, 3.35% due 7/10/1996. 1,500
Maricopa County, Arizona, Pollution Control Corp., PCR, Refunding,
VRDN (a):
1,000 (Arizona Public Service Co.), Series B, 3.45% due 5/01/2029 1,000
1,700 (Arizona Public Service Co.), Series F, 3.50% due 5/01/2029 1,700
12,000 (El Paso), Series A, 3.75% due 8/01/2015 12,000
</TABLE>
<PAGE>
<TABLE>
CMA ARIZONA 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>
Arizona Maricopa County, Arizona, School District, TAN:
(continued) $ 1,000 No. 38 (Madison Elementary), Series A, 4.45% due 7/31/1996 $ 1,004
2,000 No. 83 (Cartwright Elementary), Series C, 4.30% due 7/31/1996 2,005
1,000 Maricopa County, Arizona, Unified School District No. 4 (Mesa),
UT, Series C, 6.60% due 7/01/1996 (e) 1,007
Maricopa County, Arizona, Unified School District, TAN:
1,050 No. 93 (Cave Creek), Series C, 4.30% due 7/31/1996 1,053
6,000 No. 97 (Deer Valley), Series B, 4.60% due 7/31/1996 6,013
3,000 No. 210 (Phoenix), Series A, 4.45% due 7/31/1996 3,005
5,300 Mesa, Arizona, Municipal Development Corp., Special Tax, CP, 3.10%
due 4/23/1996 5,300
1,155 Mesa, Arizona, Utility System Revenue Refunding Bonds, 6.10% due
7/01/1996 (d) 1,162
Mohave County, Arizona, IDA, IDR (Citizens Utilities), CP, AMT:
5,400 3.40% due 4/15/1996 5,400
2,700 3.35% due 5/17/1996 2,700
2,700 3.45% due 5/17/1996 2,700
4,000 Phoenix, Arizona, IDA, M/F Housing Revenue Refunding Bonds (Paradise
Lakes Apartments Project), VRDN, 3.75% due 7/01/2025 (a) 4,000
1,650 Pima County, Arizona, IDA, IDR, Refunding (Tucson Retirement Center),
VRDN, 3.30% due 1/01/2009 (a) 1,650
Pima County, Arizona, IDA, M/F Housing Revenue Bonds, VRDN, AMT (a):
1,000 (Quail Ridge Apartments), Series B, 3.60% due 6/01/2034 1,000
1,900 (Saguaro Crest Apartments), Series A, 3.60% due 6/01/2034 1,900
1,000 Pima County, Arizona, Unified School District No. 10, Refunding
(Amphitheater), 6.40% due 7/01/1996 (d) 1,007
2,000 Pinal County, Arizona, IDA, Hospital Revenue Bonds (Casa Grande
Regional Medical Center), VRDN, 3.35% due 12/01/2022 (a) 2,000
Pinal County, Arizona, IDA, PCR (Magma Copper/Newmont Mining Corp.),
VRDN (a):
10,100 3.35% due 12/01/2009 10,100
2,000 DATES, 3.35% due 12/01/2009 2,000
1,000 Pinal County, Arizona, Unified High School District No. 82 (Casa
Grande), UT, Series A, 3.80% due 7/01/1996 (e) 1,000
</TABLE>
<PAGE>
<TABLE>
CMA ARIZONA 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>
Arizona Salt River Project, Arizona, Agricultural Improvement and Power
(concluded) Distribution, Electric System Revenue Bonds:
$ 1,300 CP, 3.15% due 8/09/1996 $ 1,300
5,430 Series A, 7.50% due 1/01/1997 (b) 5,714
1,200 Special Fund of Industrial Community, Arizona, Tax-Exempt COP,
Refunding, Bonds CP, 3.35% due 7/10/1996 (d) 1,200
1,000 Tempe, Arizona, IDA, M/F Housing Revenue Bonds (Elliots Crossing),
VRDN, 3.40% due 10/01/2008 (a) 1,000
1,765 Tucson, Arizona, IDA, IDR, Refunding (Santa Rita Hotel), VRDN, AMT,
Series B, 3.50% due 12/01/2016 (a) 1,765
Yavapai County, Arizona, IDA, IDR (Citizens Utilities), CP, AMT:
1,200 3.35% due 5/17/1996 1,200
1,900 3.45% due 5/17/1996 1,900
1,500 3.40% due 6/14/1996 1,500
500 Yuma, Arizona, IDA, IDR (Ardco Inc. Project), VRDN, 3.55% due
7/01/2003 (a) 500
3,840 Yuma, Arizona, IDA, M/F Housing Revenue Bonds (El Encanto Apartments),
VRDN, Series A, 3.40% due 11/01/2008 (a) 3,840
Puerto Rico-- 2,000 Puerto Rico Commonwealth, Government Development Bank, CP, 3.45%
1.5% due 4/03/1996 2,000
Total Investments (Cost--$136,634*)--99.4% 136,634
Other Assets Less Liabilities--0.6% 886
--------
Net Assets--100.0% $137,520
========
<FN>
(a)The interest rate is subject to change periodically based on
certain indexes. The interest rate shown is the interest rate in
effect at March 31, 1996.
(b)Prerefunded.
(c)MBIA Insured.
(d)FGIC Insured.
(e)AMBAC Insured.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA ARIZONA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1996
<S> <C> <C>
Assets:
Investments, at value (identified cost--$136,634,162) (Note 1a) $ 136,634,162
Cash 105,604
Interest receivable 893,518
Deferred organization expenses (Note 1d) 14,087
Prepaid registration fees and other assets (Note 1d) 31,145
-------------
Total assets 137,678,516
-------------
Liabilities:
Payables:
Investment adviser (Note 2) $ 54,481
Distributor (Note 2) 41,122 95,603
-------------
Accrued expenses and other liabilities 62,664
-------------
Total liabilities 158,267
-------------
Net Assets $ 137,520,249
=============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares authorized $ 13,752,701
Paid-in capital in excess of par 123,774,242
Accumulated realized capital losses--net (Note 4) (6,694)
-------------
Net Assets--Equivalent to $1.00 per share based on 137,527,008 shares of beneficial
interest outstanding $ 137,520,249
=============
</TABLE>
<PAGE>
<TABLE>
CMA ARIZONA 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 $ 4,734,021
Expenses:
Investment advisory fees (Note 2) $ 613,484
Distribution fees (Note 2) 152,808
Accounting services (Note 2) 37,954
Professional fees 35,083
Registration fees (Note 1d) 33,557
Transfer agent fees (Note 2) 24,702
Printing and shareholder reports 17,131
Custodian fees 13,722
Amortization of organization expenses (Note 1d) 7,604
Pricing fees 6,214
Trustees' fees and expenses 1,227
Other 2,278
-------------
Total expenses before reimbursement 945,764
Reimbursement of expenses (Note 2) (229,188)
-------------
Total expenses after reimbursement 716,576
-------------
Investment income--net 4,017,445
Realized Loss on Investments--Net (Note 1c) (6,694)
-------------
Net Increase in Net Assets Resulting from Operations $ 4,010,751
=============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA ARIZONA 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 $ 4,017,445 $ 2,445,657
Realized gain (loss) on investments--net (6,694) 2,450
------------- -------------
Net increase in net assets resulting from operations 4,010,751 2,448,107
------------- -------------
<PAGE>
Dividends & Distributions to Shareholders (Note 1e):
Investment income--net (4,017,445) (2,445,657)
Realized gain on investments--net (2,500) --
------------- -------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (4,019,945) (2,445,657)
------------- -------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 527,733,700 389,748,845
Net asset value of shares issued to shareholders in reinvestment of
dividends and distributions (Note 1e) 4,019,977 2,445,654
------------- -------------
531,753,677 392,194,499
Cost of shares redeemed (497,941,093) (361,894,068)
------------- -------------
Net increase in net assets derived from beneficial interest transactions 33,812,584 30,300,431
------------- -------------
Net Assets:
Total increase in net assets 33,803,390 30,302,881
Beginning of year 103,716,859 73,413,978
------------- -------------
End of year $ 137,520,249 $ 103,716,859
============= =============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA ARIZONA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
For the
Period
The following per share data and ratios have been derived Feb. 8,
from information provided in the financial statements. 1993++ to
For the Year Ended March 31, March 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Investment income--net .03 .03 .02 .002
-------- -------- -------- --------
Total from investment operations .03 .03 .02 .002
-------- -------- -------- --------
Less dividends from investment income--net (.03) (.03) (.02) (.002)
-------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total Investment Return 3.36% 2.83% 1.90% 1.78%*
======== ======== ======== ========
<PAGE>
Ratios to Average Net Assets:
Expenses, net of reimbursement .58% .54% .59% .46%*
======== ======== ======== ========
Expenses .77% .85% .98% 1.15%*
======== ======== ======== ========
Investment income--net 3.27% 2.84% 1.89% 1.86%*
======== ======== ======== ========
Supplemental Data:
Net assets, end of period (in thousands) $137,520 $103,717 $ 73,414 $ 41,437
======== ======== ======== ========
<FN>
*Annualized.
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
CMA ARIZONA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Arizona 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.
<PAGE>
(f) Reclassification--Generally accepted accounting principles
require that certain components of net assets be reclassified to
reflect permanent differences between financial reporting and tax
purposes. Accordingly, current year's permanent book/tax differences
of $65 have been reclassified from paid-in capital in excess of par
to accumulated net realized capital losses. 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" 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.
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 ARIZONA 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 the year which will cause such
expenses to exceed the pro rata expense limitation at the time of
such payment. For the year ended March 31, 1996, FAM earned fees of
$613,484, of which $229,188 was voluntarily waived.
<PAGE>
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.
4. Capital Loss Carryforward:
At March 31, 1996, the Fund had a net capital loss carryforward of
approximately $6,000, all of which expires in 2004. This amount will
be available to offset like amounts of any future taxable gains.
<AUDIT-REPORT>
CMA ARIZONA MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA Arizona 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 Arizona
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 three-year period then ended and for the period
February 8, 1993 (commencement of operations) to March 31, 1993.
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.
<PAGE>
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. 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 Arizona 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.
Deloitte & Touche LLP
Princeton, New Jersey
April 29, 1996
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA
Arizona 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, the Fund distributed short-term capital gains of
$.000020 per share to shareholders of record on December 29, 1995.
There were no long-term capital gains distributed during the Fund's
taxable year ended March 31, 1996.
Please retain this information for your records.
