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Check the incinerators, how many trucks are being used?
Also, check to see if you're generating more garbage than being used by incinerators. I've always had to plop down 3+ incinerators to cover garbage intake. All of this is in the garbage tab.
I have a small town across the river and have a garbage dump and an incinerator and not far from it is a Cargo Ship yard that isn't operating because of Trash is full. I have the budget at 100% for garbage and the garbage dump isn't full, so not sure what is wrong.
This is my favorite policy and the only one that's really worth the money.
The screenshot shows a city which is really spread out. The incinerators do have a coverage efficiency area, so you might have to relocate one of them to get green coverage everywhere. I used to have 3 incinerators in one corner of my town but had problems collecting garbage. Adding more incinerators did not help. I relocated one incinerator to the opposite side of town so all roads are green and now I have no problems anymore.
Also check Garbage Info View to make sure your incinerators are in the green, keeping up with garbage production.