Sec. 2. It is hereby declared to be the policy of the state of Indiana that:
(1) the net amount in the motor vehicle highway account shall be budgeted for programs of traffic safety and for the construction, reconstruction, improvement, and maintenance of the highways of the state;
(2) a fair distribution thereof shall be made between the department and subordinate political subdivisions having jurisdiction of highways of the state;
(3) the funds allotted shall be used in accordance with the policy herein declared and the provisions of this chapter; and
(4) the funds allocated to counties, cities, and towns from such motor vehicle highway account shall be budgeted as provided by law, and such county budgets shall be referred to the county council for approval, revision, or reduction.