§ 261. Apportionment and source of funds. Construction of highways under this chapter shall proceed equitably among counties as far as practicable, using as a basis the ratio that the unbuilt mileage in each county bears to the total unbuilt mileage in the state, as herein provided. The funds necessary to provide for the construction or improvement of the highways designated in sections three hundred and forty and three hundred and forty-one of this chapter shall be derived from the proceeds of the sale of any bonds duly authorized for the construction or improvement of highways, from funds contributed by act of congress to the state of New York, for the construction of rural post roads, from funds furnished by the counties, towns or other municipalities as provided by this chapter, or from funds derived from direct appropriations by the legislature.

The obligation of the state for any improvement provided in this chapter, based on the engineer's estimate of the cost may be reduced upon the award of a contract therefor at an amount under which the cost to the state will be less than the original obligation.