If bond holders take the hit then you can bet these cities and other financially shakey California cities will find it impossible to raise money via bonds in the future. Thus, taxpayers will get hammered even harder. It would be a good time for anyone living in such a city to sell their real estate and get the heck out of Dodge because property taxes are going to skyrocket.
You would think that. And I hope that is precisely what will happen. Sadly, creditors probably won't stay away. They always have a way of coming back to even bankrupt countries that go through default. New creditors see an entity that suddenly has no debt and figure it's safe for them to loan money at a better than average rate of return. Same thing happens to individuals that go through bankruptcy - they'll usually get credit offers not long after discharge. It's why we shouldn't ever be bailing out bondholders.