CMA ARIZONA
MUNICIPAL MONEY FUND
Annual Report
March 31, 1998
MERRILL LYNCH BULL LOGO
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
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 1998, CMA Arizona Municipal Money Fund
paid shareholders a net annualized yield of 3.05%.* As of March 31,
1998, the Fund's 7-day yield was 2.97%.
Economic Environment and
Investment Strategy
Arizona's consumer confidence continued to rise through 1997
calendar year-end according to a quarterly report by Valley Bank of
Arizona. This confidence is supported by five consecutive years of
substantial tax reductions and the most prolonged period of above-
average growth in 30 years. During this time, personal income taxes
were cut 28%, and the state's budget surplus, including its rainy
day fund, rose to nearly $900 million. Moreover, Arizona Governor
Jane Dee Hull said she favors a tax cut of at least $200 million in
1998. Although the state's economy is expected to moderate this
year, state officials predict Arizona will outperform the national
economy during 1998. This is because of a favorable mix of
employment, especially in the state's metropolitan areas where labor
markets are heavily weighted toward high-tech industries,
specifically electronics and components manufacturing. For example,
in a new survey focusing on the impact of high technology, Arizona
entered 1998 showing solid gains in job creation and declining
unemployment. Consequently, although the rate of growth is expected
to subside as a result of the weakness in Southeast Asia, the
overall number of manufacturing jobs is expected to be up by 2.3% in
1998. Also contributing to this outlook is the fact that the state's
leading domestic trading partner is presently enjoying another solid
year in terms of job growth. California's job growth, which was up
2% in 1997, is expected to increase another 2.5% in 1998. Continued
growth in the Mexican economy will also be beneficial. Overall,
after growth of 5.6% in 1996 and 4.3% in 1997, employment is
expected to increase 3.5% in 1998 because of continued above-average
population growth. In 1998, state officials project population
growth of 2.7%, which translates into almost 130,000 more Arizona
residents.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Throughout the fiscal year ended March 31, 1998, we maintained a
relatively neutral average portfolio maturity. We significantly
extended the Fund's average portfolio maturity only when the short-
term tax-exempt yield curve steepened. This steepening occurred at
tax time in April 1997 when cash outflows drove up yields on short-
term tax exempt securities and, more prominently, in late summer
1997 when states issued their annual cash flow notes. However, for
most of the fiscal year, a decrease in total fixed-rate issuance
resulting from healthy state economies and continued cash inflows
kept the short-term tax-exempt yield curve relatively flat. For
example, yields on 90-day tax-exempt commercial paper performed on
average with those on short-term tax-exempt notes maturing in six
months--one year for a large part of the period. Thus, for a
majority of that time, we used tax-exempt commercial paper when we
wanted to pursue a more aggressive strategy.
Furthermore, during the year ended March 31, 1998, assets of tax-
exempt money market funds rose by $25.6 billion, an increase of over
17%. The Fund, which began the fiscal year with an average portfolio
maturity in the 30-day range, concluded the period in the 35-day
range. Our strategy allowed the Fund to perform on average relative
to similar Arizona tax-exempt money market funds for the year ended
March 31, 1998. Finally, we continue to focus on diversification and
credit quality when choosing Fund investments, and we constantly
monitor the ever-changing marketplace and adapt our investment
strategy when necessary.
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,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Darrin J. SanFillippo)
Darrin J. SanFillippo
Vice President and Portfolio Manager
April 30, 1998
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].
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
GO General Obligation Bonds
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
<TABLE>
CMA ARIZONA 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>
Arizona-- $ 700 Apache County, Arizona, IDA, IDR (Tucson Electric Power--Springerville
98.1% Project), VRDN, Series C, 3.85% due 12/15/2018 (a) $ 700
10,500 Apache County, Arizona, IDA, PCR (Tucson Electric Power), VRDN, Series A,
3.75% due 5/15/1998 (a)(e) 10,500
Arizona Educational Loan Marketing Corp., Educational Loan Revenue Bonds,
VRDN, AMT, Series A (a):
5,400 3.75% due 3/01/2015 (c) 5,400
3,200 3.75% due 12/01/2020 3,200
2,400 Arizona Health Facilities Authority, Hospital Systems Revenue Bonds (Northern
Arizona Healthcare), VRDN, AMT, Series B, 3.65% due 10/01/2026 (a)(c) 2,400
290 Arizona Health Facilities Authority Revenue Bonds (Arizona Voluntary Hospital
Federation), VRDN, Series B, 3.65% due 10/01/2015 (a)(d) 290
6,000 Cochise County, Arizona, Pollution Control Corp., Solid Waste Disposal
Revenue Bonds (Arizona Electric Power Cooperative, Inc. Project), AMT,
3.55% due 9/01/1998 6,000
Coconino County, Arizona, Pollution Control Corp., Arizona Public Service
Revenue Bonds, VRDN, AMT, Series A (a):
6,710 3.80% due 12/01/2031 6,710
12,600 (Navajo Project), 3.80% due 10/01/2029 12,600
1,850 Coconino County, Arizona, Unified School District No. 1 (Flagstaff), TAN,
Series A, 4.40% due 6/30/1998 1,852
Maricopa County, Arizona, IDA, IDR (Citizens Utility), CP:
1,465 3.55% due 5/12/1998 1,465
7,500 3.60% due 7/09/1998 7,500
Maricopa County, Arizona, IDA, M/F Housing Revenue Bonds, VRDN, AMT (a):
6,200 (Privado Park Apartments Project), Series A, 3.80% due 12/15/2033 6,200
5,200 (Vista Ventana Apartments Project), Series D, 3.80% due 12/15/2033 5,200
Maricopa County, Arizona, Pollution Control Corp., PCR, CP (Southern California
Edison--Palo Verde Project):
2,300 Series D, 3.45% due 6/12/1998 2,300
3,700 Series E, 3.50% due 4/06/1998 3,700
1,200 Series E, 3.55% due 7/14/1998 1,200
Maricopa County, Arizona, School District, TAN:
2,000 No. 06 (Washington Elementary), Series C, 4.60% due 6/30/1998 2,004
1,000 No. 08 (Osborn), UT, Series A, 4.40% due 6/30/1998 1,001
3,000 No. 40 (Glendale), UT, Series B, 4.80% due 6/30/1998 3,007
2,000 No. 66 (Roosevelt Elementary), Series B, 4.80% due 6/30/1998 2,004
4,000 Maricopa County, Arizona, Unified High School District, No. 210 (Phoenix Project
of 1995), UT, Series B, 8% due 7/01/1998 4,040
</TABLE>
<TABLE>
CMA ARIZONA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Arizona Maricopa County, Arizona, Unified School District, TAN:
(continued) $ 5,000 No. 11 (Peoria), UT, Series A, 4.40% due 6/30/1998 $ 5,006
2,000 No. 41 (Gilbert), Series C, 4.60% due 6/30/1998 2,004
3,000 No. 69 (Paradise Valley), Series C, 4.60% due 6/30/1998 3,006
1,000 No. 93 (Cave Creek), UT, Series A, 4.40% due 6/30/1998 1,001
2,500 No. 97 (Deer Valley), UT, Series A, 4.40% due 6/30/1998 2,503
Mohave County, Arizona, IDA, IDR (Citizens Utilities Co. Project), AMT:
5,000 CP, 3.80% due 4/07/1998 5,000
5,400 CP, 3.60% due 5/15/1998 5,400
2,090 VRDN, 3.75% due 5/01/2032 (a) 2,090
4,120 Navajo County, Arizona, IDA, IDR (Citizens Utilities Co. Project), VRDN, AMT,
3.75% due 5/01/2032 (a) 4,120
7,000 Phoenix, Arizona, Civic Improvement Corporation, Wastewater System Lease
Revenue Bonds, VRDN, 3% due 7/01/2003 (a) 7,000
1,000 Phoenix, Arizona, GO, UT, 6.50% due 7/01/1998 1,007
Phoenix, Arizona, IDA, IDR, VRDN, AMT (a):
4,535 (Laich Industries Corp. Project), 3.85% due 9/01/2016 4,535
1,500 Refunding (V.A.W. of America, Inc.), 3.85% due 2/01/2012 1,500
Phoenix, Arizona, IDA, M/F Housing Revenue Bonds, VRDN (a):
3,000 (Heather Ridge Apartments Project), AMT, Series A, 3.80% due 12/15/2037 (f) 3,000
8,420 (Mariners Poinnte Apartments Project), AMT, Series A, 3.95% due 10/01/2023 8,420
4,000 Refunding (Paradise Lakes Apartments Project), 3.85% due 7/01/2025 4,000
7,770 (Sunset Ranch), COP, 3.80% due 12/01/2027 7,770
1,100 Phoenix, Arizona, VRDN, UT, Series 95-2, 3.70% due 6/01/2020 (a) 1,100
Pima County, Arizona, IDA, Industrial Revenue Refunding Bonds, VRDN (a):
1,000 (Brush Wellman Inc., Project), 3.80% due 9/01/2009 1,000
1,650 (Tucson Retirement Center), 3.45% due 1/01/2009 1,650
Pima County, Arizona, IDA, M/F Housing Revenue Bonds, VRDN (a):
1,000 (Quail Ridge Apartments), AMT, Series B, 3.80% due 12/15/2033 1,000
6,790 Refunding (Eastside Place Apartments), 3.75% due 5/01/2027 6,790
5,000 Refunding (La Cholla Apartments Project), 3.70% due 12/01/2025 5,000
Pima County, Arizona, Unified School District, UT, Series A (d):
500 No. 06 (Marana Project of 1997), 3.75% due 7/01/1998 500
1,000 No. 10 (Amphitheater Projects of 1994), 7% due 7/01/1998 1,009
7,100 Pinal County, Arizona, IDA, Hospital Revenue Bonds (Casa Grande Regional
Medical Center), VRDN, 3.70% due 12/01/2022 (a) 7,100
2,700 Pinal County, Arizona, IDA, PCR (Magma Copper/Newmont Mining Corp.),
VRDN, 3.65% due 12/01/2009 (a) 2,700
400 Pinal County, Arizona, IDA, PCR (Newmont Mining Corp.), DATES, VRDN,
3.65% due 12/01/2009 (a) 400
2,380 Santa Cruz County, Arizona, IDA, IDR (Citizens Utilities), CP, 3.55% due 5/12/1998 2,380
5,900 Tempe, Arizona, Excise Tax Revenue Bonds, VRDN, 3.70% due 7/01/2023 (a) 5,900
Yavapai County, Arizona, IDA, IDR (Citizens Utilities), CP, AMT:
100 3.50% due 4/07/1998 100
3,300 3.80% due 4/07/1998 3,300
4,500 3.55% due 8/14/1998 4,500
1,600 Yavapai County, Arizona, IDA, IDR, Refunding (Kachina Pointe Project), VRDN,
3.45% due 1/01/2009 (a) 1,600
</TABLE>
<TABLE>
CMA ARIZONA 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>
Arizona $ 810 Yuma and La Paz Counties, Arizona, Community District, Revenue Refunding
(concluded) Bonds (Arizona Western College), UT, 6.20% due 7/01/1998 (b) $ 815
2,000 Yuma, Arizona, IDA, IDR (Meadowcraft Inc., Project), VRDN, 3.85% due
11/01/2012 (a) 2,000
3,625 Yuma, Arizona, IDA, M/F Housing Revenue Bonds (El Encanto Apartments),
VRDN, Series A, 3.50% due 11/01/2008 (a) 3,625
Puerto Rico-- Puerto Rico Commonwealth, Government Development Bank:
1.1% 1,235 CP, 3.10% due 4/09/1998 1,235
1,200 Refunding, VRDN, 3.375% due 12/01/2015 (a)(c) 1,200
Total Investments (Cost--$211,539*)--99.2% 211,539
Other Assets Less Liabilities--0.8% 1,738
--------
Net Assets--100.0% $213,277
========
<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.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FGIC Insured.
(e)Prerefunded.
(f)FNMA Collateralized.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA ARIZONA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1998
<S> <C> <C>
Assets:
Investments, at value (identified cost--$211,539,074) (Note 1a) $ 211,539,074
Cash 52,253
Interest receivable 1,543,955
Prepaid registration fees and other assets (Note 1d) 340,567
--------------
Total assets 213,475,849
--------------
Liabilities:
Payables:
Investment adviser (Note 2) $ 91,550
Distributor (Note 2) 58,040 149,590
--------------
Accrued expenses and other liabilities 49,570
--------------
Total liabilities 199,160
--------------
Net Assets $ 213,276,689
==============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares
authorized $ 21,331,822
Paid-in capital in excess of par 191,986,330
Accumulated realized capital losses--net (Note 4) (41,463)
--------------
Net Assets--Equivalent to $1.00 per share based on 213,318,217 shares of
beneficial interest outstanding $ 213,276,689
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA ARIZONA 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 earned $ 6,619,245
Expenses:
Investment advisory fees (Note 2) $ 888,435
Distribution fees (Note 2) 218,259
Registration fees (Note 1d) 58,957
Professional fees 50,484
Accounting services (Note 2) 39,972
Transfer agent fees (Note 2) 24,502
Custodian fees 16,478
Amortization of organization expenses (Note 1d) 6,503
Pricing fees 3,394
Trustees' fees and expenses 1,289
Other 559
--------------
Total expenses 1,308,832
--------------
Investment income--net 5,310,413
Realized Loss on Investments--Net (Note 1c) (5,210)
--------------
Net Increase in Net Assets Resulting from Operations $ 5,305,203
==============
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: 1998 1997
<S> <C> <C>
Operations:
Investment income--net $ 5,310,413 $ 4,215,621
Realized loss on investments--net (5,210) (29,558)
-------------- --------------
Net increase in net assets resulting from operations 5,305,203 4,186,063
-------------- --------------
Dividends to Shareholders (Note 1e):
Investment income--net (5,310,413) (4,215,621)
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (5,310,413) (4,215,621)
-------------- --------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 823,452,683 811,252,304
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 5,310,334 4,215,615
-------------- --------------
828,763,017 815,467,919
Cost of shares redeemed (785,032,055) (783,407,673)
-------------- --------------
Net increase in net assets derived from beneficial interest transactions 43,730,962 32,060,246
-------------- --------------
Net Assets:
Total increase in net assets 43,725,752 32,030,688
Beginning of year 169,550,937 137,520,249
-------------- --------------
End of year $ 213,276,689 $ 169,550,937
============== ==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA ARIZONA 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 asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Investment Return 3.05% 2.86% 3.35% 2.83% 1.90%
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses, net of reimbursement .74% .76% .58% .54% .59%
======== ======== ======== ======== ========
Expenses .74% .76% .77% .85% .98%
======== ======== ======== ======== ========
Investment income--net 2.99% 2.80% 3.27% 2.84% 1.89%
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of year (in thousands) $213,277 $169,551 $137,520 $103,717 $ 73,414
======== ======== ======== ======== ========
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 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.
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.
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.
CMA ARIZONA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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 $41,000, of which $6,000 expires in 2004, $30,000
expires in 2005 and $5,000 expires in 2006. 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, 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
supporting 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 Arizona 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 5, 1998
</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, 1998 qualify as tax-
exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund
during its taxable year ended March 31, 1998.
Please retain this information for your records.
