Street lights do cost money to install, maintain and operate. It has to be covered somehow. In many places the already overloaded taxpayers understandably refuse to support any increase in the rates, and so local governments have been using fees, assessments, and other methods of getting more money. It's merely a matter of how the sheep are fleeced.
To keep down the cost of local government, you have to cut back its activities. Yes, there is a lot of waste and corruption. With government there always is. You'll never make it efficient, so don't delude yourself that is the way to control its expenses. The only avenue open to you to make it less costly it is to reduce its size and eliminate things it does. In this particular matter, that would mean doing without those street lights.
To answer your question directly, yes, it is legal for your government to render special charges to cover the cost of those lights. As voters you can put a stop to it, but you do need to understand that in doing so you must make it do less. Nothing is free. There are always tradeoffs. Make your choice and act on it. You can't expect to avoid the costs of public services by fiddling with the techniques used to pass them on to you.