As far as the constitutionality of local taxes- yes, they are constitutional (whether they are libertarian in a pure sense is a different issue). The Constitution only applies to powers of the Federal government, leaving other matters to the States (see the 10th amendment).
I remember reading the article you linked about the fire department around a year ago. The quasi-free market fire crew refused to put out a fire because the family hadn't paid a fee (I say quasi-free market because I believe it was actually a local town's fire department who expanded into a sort of monthly subscription for the surrounding countryside). This story raises an emotional response due to the image of a fire crew looking on and refusing to help while someone's house burns down (I think they should have helped out, for the record). But to say they have some sort of obligation is an entirely different story. Does a car insurance company have an obligation to replace my car if I failed to renew my policy? I took the risk and now I have to take responsibility for my decision. Also, the fire department is not a charity and would not be able to exist without the funds collected from subscribers. In other words, there wouldn't even be a fire department to look on if no one paid for the service. This may not be relevant to this case, but what about all the times they did put out a fire?
All that being said, I don't think that taxes are necessary for things like fire department. An "insurance" model similar to the one used by the fire department in the article (albeit, poorly executed) would be much more effective. Price signals from rural areas like the ones in the article would draw fire departments to the area. Those who don't purchase the subscription could be charged a fee when the service is used (like emergency medical situations currently are for those without health insurance). Competition between different firms would drive down the cost, and no one would be coerced into paying for something they don't choose to.
Want DP delivered to your inbox daily? Subscribe here: