All along the streets of Berkeley, Calif., the sight of bulging recycling bins and downsized trash cans is an environmentalist’s dream. The city is a shining example of just how successful recycling programs can be, with residents priding themselves on sending as little garbage to the landfill as possible.

But for all its ecological benefits, Berkeley’s push to throw away less has had an unexpected financial impact: the decline in refuse revenue has added $4 million to the city’s $10 million budget deficit for 2010.

The San Francisco Chronicle reports that the combination of enthusiastic recycling and the recession has put the city’s budget in the dumps, as people buy less and have less packaging to dispose of as a result. A drastic reduction in construction debris also plays a large role. Trash is the only collection for which the city charges.

Just last August, Mayor Tom Bates told The Los Angeles Times that ‘recycling is his religion’. Bates has instigated a number of green programs and practices in Berkeley as part of a goal to reduce the city’s greenhouse gas emissions by 80 percent by the year 2050. Mayor since 2002, Bates helped Berkeley gain renown as one of America’s most sustainable cities.

But some of that progress may come to a screeching halt as officials grapple with the problem of less cash from trash. While the public works department will focus on cutting costs and improving inefficiencies, rate hikes and cuts in other areas will likely follow.

"The whole business model for recycling and garbage has been to incentivize recycling," Andrew Clough, the city's deputy director of public works, told the SF Chronicle. "We're going to have to do a new business model."