Our city just had a compost program. Throwing away compostable material into the provided bin was free. They put it into the city managed compost yards and then every weekend you could go down there and pick up bags of the finished product to use at home in your garden.
It's also the case that many states already have a "garbage feeding" program that allows food waste to be diverted into feed for commercial animal lots. The food has to meet certain criteria and be fully cooked and ready for human consumption before being discarded.
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Cooking does not destroy prions to any significant extent. They’re even resistant to autoclaving. It’s one of the big reasons that prion diseases are so pernicious. The garbage feeding you describe could absolutely spread prion diseases for the same reason that use of animal byproducts in feeds spread BSE in Europe.