With a city government (or school board, or...) that not only spends through it's tax revenue, but exhausts its' bonding ability, and then still runs a massive deficit?
Well, in Michigan, they have an answer - an exceptionally powerful "Emergency Financial Manager" appointed by the Governor, under certain fairly specific conditions. The EFM can do a number of fairly exciting things - unilaterally modify or abrogate contracts, push the city into bankruptcy, or push the city into either merging with another entity or simply going out of business. And city elected sorts are barred from exercising their powers without the written consent of the EFM for the duration.
It seems the City of Benton Harbor, MI (a suburb of Detroit apparently noted for corruption) has achieved this status. And gee whiz, the usual suspects are peeved at having their toys taken away.
Well - what can you do with a City Gov't (or other such) gov't gone fiscally rogue? At some point, the ability of the local folks to absorb new taxes is exceeded, and the area economy implodes as employers and citizens move to greener pastures... and you are still, as a city, broke and in debt...but now with even fewer to financially support your foolishness.