Resignation of Atlantic City mayor won't bring policy shifts

A sudden mayoral change in Atlantic City is not expected to yield any major policy changes as the Jersey Shore gambling hub gets set to begin its fourth year under state intervention.

City Council President Marty Small was sworn in as acting mayor Friday after the resignation of Frank Gilliam, who pleaded guilty in federal court to embezzling more than $87,000 from a youth basketball club he co-founded. Small, who lost a close Democratic mayoral primary to Gilliam in 2017, is a veteran of Atlantic City government who was first elected as a councilman in 2003.

Kevin Coughlin/Bloomberg

The Atlantic City leadership change occurs under a state takeover law that took effect in November 2016 under former Gov. Chris Christie after the cash-strapped local government nearly defaulted on its debt. The state’s continued involvement with Atlantic City finances should mute much of the impact from a shakeup in city hall, according to Marc Pfeiffer, assistant director of Rutgers University's Bloustein Local Government Research Center.

“The mayor doesn’t have a lot of authority over running the city,” said Pfeiffer of Atlantic City’s limitations under the Municipal Stabilization and Recovery Act. “They still have to be attentive to what the state has been doing.”

Gilliam had praised New Jersey Gov. Phil Murphy’s administration in April after the release of a 21-page plan that offered a road map for Atlantic City to achieve fiscal strides through a collaborative effort with the state. The report was released shortly after New Jersey’s Department of Community Affairs, which is overseeing the state intervention, lauded Atlantic City for crafting a third consecutive budget with no tax increase while also reaching a collective bargaining agreement to provide raises for municipal workers.

“The vision and the direction doesn’t change,” Small said during a swearing-in ceremony last Friday. “My colleagues on the city council along with the state of New Jersey have worked incredibly hard to stabilize the tax base.”

Small said he has been in touch with state officials since taking on the mayoral duties and expects his previous working relationship in Trenton as city council president to enable a smooth transition. DCA spokeswoman Lisa Ryan said Monday that the mayoral change will have no impact on the agency’s authority under the state takeover legislation.

For the moment Small is holding dual mayor and city council roles. The Atlantic City Council is slated to install a mayor this week who will hold the position until the general election in November 2020.

Fiscal progress achieved under state supervision helped land Atlantic City a four-notch upgrade by S&P Global Ratings last October to a higher junk rating of B from CCC-plus. Moody’s Investors Service upgraded the city’s general obligation bonds two notches to B2 from Caa3 in November citing an improved casino industry and efforts to diversify the tax base.

“The removal of the mayor of Atlantic City will have no credit impact,” Moody’s analyst Doug Goldmacher said in a statement Monday. “This would most likely be the case under normal circumstances and is even more certain given the state’s ongoing oversight of the city and its governance.”