Normally, the reduction in landfill fees is counted as a saving in favor of recycling, interesting that in your case it's the opposite and seen as an income stream for the people deciding whether to recycle or not. Sounds like a political problem, though I accept that in theory there could be places where it makes neither economic, nor ecological sense to try to recycle. I'd only really trust a proper expert analysis on that though, as it's quite complex (e.g. if you profit from recycling A, but it costs you to recycle B, does it still make sense to recycle both if some of the cost are shared by both materials)