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Majority small and medium cities in Indonesia have difficulty managing municipal solid waste. The budget constraints have always been the main reason for the Local Government in managing waste. Undeniable that the budget is an important component which can inflict a domino effect on each component of the waste management system, especially on Service Coverage for Waste (SCW). So far, the budgetary relationship with SCW in Indonesia has always been directly proportional. This means a large waste management budget will always increase the value of SCW. Contrariwise, cities with a minimum budget the SCW value never meets Minimum Service Standard (PPM) of 70%. Though key success indicators of Local Government in managing sustainable waste refer to the SPM. This is causes accumulation of waste piles problems that cannot be managed, as happened in Serang City. Not only SCW problems but also the domino effect caused by the budget component provides a chain reaction to each component waste management system in Serang City. To overcome the complexity of these problems, it requires a comprehensive approach. Therefore, a quantitative approach with System Dynamics modeling method is used in this research. Simulation model on Business as Usual (BAU) results, components of SCW, CH₄ emissions, carrying capacity TPA Cilowong, and waste management budget in the Serang City, haven't been able to fulfill the status of sustainable development. Intervention is needed to influence the performance of the model. The intervention is carried out by applying two alternative scenarios of waste management fiscal policy. The most optimal model performance that can be applied in Serang City, is a cross subsidy intervention. The results of SCW average amounted to 75.20% per year, a decrease in CH₄ emissions of 35.78%, increase carrying capacity TPA Cilowong by 15.35% and increase waste management budget of 12.55% per year.

System Dynamics, models, waste management system, waste management budget, CH4 emissions, carrying capacity of landfills, alternative fiscal policy.